Muthoot Microfin will see Greater Pacific Capital increase its stake in company to 16%

13 Sept 2022 , 10:24 AM

Greater Pacific Capital (GPC), a UK-based private equity investor, plans to invest $10 million in Muthoot Microfin to increase its position to roughly 16%, according to news reports.

GPC now owns 14.37% of the NBFC-MFI, the Muthoot Pappachan group's microfinance division.

Sadaf Sayeed, the chief executive officer of Muthoot Microfin, told ET that "we expect the deal to close by the end of September."

Investors with a focus on India are increasing their investment in the financial inclusion sector at a time when analysts predict that India will become the major economy with the quickest rate of growth. India recently surpassed the UK to claim the honour of having the fifth-largest economy.

In order to finance development potential, the microlender is also attempting to raise Rs3,500 crore in debt.

By the end of March of next year, the lender, which now has assets under the control of Rs7,200 crore, wants to increase those assets to Rs8,500 crore. At the end of March this year, the AUM stood at Rs6,254 crore.

GPC's investment in Muthoot Microfin is it's first in the microfinance industry in India. With an initial investment of $50 million, it joined the team in December of last year. The promoter Muthoot Fincorp owns 54.5% of the micro-lender, making it the largest outside investor.

According to data from the industry group Sa-Dhan, India's microfinance market increased 24% year over year to Rs2.76 lakh crore at the end of June from Rs2.22 lakh crore.

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