Muthoot Finance As NBFC

Muthoot Finance : “Unchanging

Values…..In Changing Times.”

MUTHOOT GROUP• Company set up: 1887 at Kozhencherry by “Muthoot Ninan Mathai”.• Kerala based company.• Operates in 21 states in India and has customer base of over 25

million.• Later taken over by M. George Muthoot.• Muthoot Group, with its subsidiary Muthoot Finance since 1939 is

primarily involved in the Financial sector of the country.• falls under the category of Non Banking Financial Company

(NBFCs) of the RBI guidelines.• has more than 1400 branches spread across 20 states of the

country.• Muthoot also provides various financial services such as Insurance

distribution, Wealth Management, Foreign Exchange, Money Transfer and Vehicle & Asset Finance.

MUTHOOT FINANCE

• Originally incorporated as a private limited company on March 14, 1997 with the name “The Muthoot Finance Private Limited” under the Companies Act.

• By fresh certificate of incorporation dated May 16, 2007, our name was changed to “Muthoot Finance Private Limited”.

• The Company was converted into a public limited company on November 18, 2008 with the name “Muthoot Finance Limited” and received a fresh certificate of incorporation consequent upon change in status on December 02, 2008 from the RoC.

• Muthoot Finance has more than 2611 branches spread across 25 states of the country.

Contd ……

• Subsidiaries: finance Information Technology Security Media Hotels & Hospitality Housing & Infrastructure Other Divisions Philanthropy Environment Research Foundation

Key Events, Milestones and Achievements Year

• 2001 RBI license obtained to function as an NBFC.• 2004 Obtained highest rating of F1 from Fitch Ratings for short term

debt of Rs. 200 million.• 2005 Retail loan and debenture portfolio of the Company exceeds

Rs. 500 million.• 2006 F1 rating obtained from Fitch Ratings affirmed with an

enhanced short term debt of Rs. 400 million.• 2007 Retail loan portfolio of the Company crosses Rs. 10 billion.• 2008 Net owned funds of the Company crosses Rs. 2 billion.• 2009 Retail loan and debenture portfolio crosses Rs. 30 billion and

Rs. 15 billion respectively.• 2010 Retail loan and debenture portfolio crosses Rs. 50 billion and

Rs. 20 billion respectively.

Financial Performance

Source: http://stockshastra.moneyworks4me.com

WHAT IS NBFC?

• Non-bank financial companies (NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank.

• One that does not hold a banking license.• All operations of these institutions are still exercised

under bank regulation.• NBFCs offer most sorts of banking services, such as

loans and credit facilities, private education funding, retirement planning, trading in money markets, underwriting stocks and shares, TFCs and other obligations.

Important Regulations relating to Acceptance of Deposits

• They are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months.

• They cannot accept deposits repayable on demand. • They cannot offer interest rates higher than the ceiling rate prescribed

by RBI from time to time.• They cannot offer gifts/incentives or any other additional benefit to the

depositors. • They should have minimum investment grade credit rating. • Their deposits are not insured.• The repayment of deposits by NBFCs is not guaranteed by RBI.

Source: www.rbi.org.in

Types of NBFCs registered with RBI

• Equipment leasing company• Hire-purchase company• Loan company• Investment companyHowever, with effect from December 6, 2006 theabove NBFCs registered with RBI have been reclassified

as:

. Asset Finance Company (AFC) . Investment Company (IC) . Loan Company (LC)

Classification of NBFCs

Depending upon their nature of activities, non- banking finance companies can be classified into the following categories:

• Development finance institutions• Leasing companies• Investment companies• House finance companies• Venture capital companies• Corporate development companies

MUTHOOT FINANCE AS NBFC

• Muthoot Finance falls under the category of Systematically Important Non Banking Financial Company of the RBI guidelines.

• The company has more than 3,510 branches spread across 23 states of the country and is the largest gold loan company in India.

• Muthoot Finance is the largest Gold Loan NBFC and has the largest network of branches for a Gold Loan NBFC in India.

• The Company serves 30,000 customers a day on average.

Muthoot sees a 'golden' opportunity for NBFCs

• THIRUVANANTHAPURAM: Grabbing a banking licence may be high on the wish list of financial services sector players post budget, but Kerala-based diversified conglomerate Muthoot Pappachan group feels the future is equally glittering in the gold loan business within the NBFC ambit.

• "We haven't really tapped the gold loan business considering the huge potential the sector has", says Thomas John Muthoot, CMD of Muthoot Fincorp, part of the Muthoot Pappachan group that has interests as diverse as financial services, hospitality, IT infrastructure and flight catering.

Muthoot finance secured NCD in 2011-12

Source:www.onemint.com

Muthoot Finance launches Western Union money transfer service

• NEW DELHI: Gold finance company Muthoot Finance has tied up with the Western Union Company and Paul Merchant Limited for providing money transfer services through various branches of the company across the country.

• "Muthoot Finance will now offer Western Union Money Transfer services from its countrywide network of 2,800 locations linking them to Western Union's network of more than 40,000 locations across 200 countries.”

Muthoot’s Cooperation

• Muthoot Fincorp co-sponsors the 14th Asianet Film Awards.

• Muthoot Pappachan Group gears up for Formula One.• The 5th Muthoot Pappachan T 20 Cricket Tournament

organised by Muthoot ECC.• Muthoot Pappachan Group encourages Indian

participants to win Gold at the Commonwealth Games. Go India! Go For Gold!

• Sanchaari: presented by Muthoot Pappachan Foundation.

• Muthoot Pappachan Foundation’s Bus Aur Nahin anti-ragging roadshow flagged off in Delhi.

Muthoot Finance puts customer in a spot

• Despite having repaid a loan taken against gold, the NBFC is refusing to return the gold to a client, contends that another loan was taken against the same gold collateral on the day of repayment.

Award & Achievements

• Asian Business man of the year 2011• “Shri M.G. George Muthoot" ,"50" richest man in

India• "Businessman of the Decade" Award• Life Time Achievement Award• TIMES OF INDIA award for Excellence in

Bussiness• Awards to "Shri M.G. George Muthoot",

Chairman of The Muthoot Group• Mr. George Alexander Muthoot awarded Ph.D

Success Mantra of Muthoot

• “Share market is nothing but a game of temperament.”

• “Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays”

COMPARISON WITH ITS CLOSEST COMPETITOR

MUTHOOT GROUP It recently came out with an

IPO at a price of Rs.175 and the stock is currently ruling at Rs. 162.

The market cap of the group is 6086 crores.

The ROE of muthoot group has been well above 30% and ROA is well above 3%

MANAPPURAM GROUP It had a strong run up in

nov.2010 but since then has been underperforming.

The market cap is of 4714 crores.

The ROE of the group has been between 20-25%and ROA are above 4%.

FINANCIAL COMPARISON

MUTHOOT GROUP MANAPPURAM GROUPYEAR

‘07 ‘08 ‘09 ‘10 ‘11

O.P. Inc

43 79 165 477 1188

PBT 16 32 46 182 424

Net Profit

10 21 30 120 282

YEAR ‘07 ‘08 ‘09 ‘10 ‘11

O.P. Inc

230 366 615 1077 2298

PBT 70 97 148 345 761

Net Profit

44 64 98 227 494

THANK YOU

Matter Compiled and edited byLove Mahajan