Fusion Microfinance IPO comprises fresh issuance of equity shares worth ₹600 crore and an offer of sale (OFS) of 13,695,466 equity shares by promoters and existing shareholders.
As per market observers, Fusion Microfinance shares are commanding a premium (GMP) of ₹33 in the grey market today. The company's shares are expected to list on stock exchanges BSE and NSE on Tuesday, November 15, 2022.
The New Delhi-headquartered microfinance company provides financial services to underserved women across India to facilitate their access to greater economic opportunities. The company's business runs on a joint liability group-lending model, wherein a small number of women form a group (typically comprising five to seven members) and guarantee one another's loans.
The IPO-bound company is planning secured loan arm for SMEs. "We've been lending to MSMEs for some time now and currently have ₹200 crore assets under management. This is a fully secured loan and we give up to ₹3.25 lakh to borrowers most of whom are existing borrowers. Post-IPO, we want to scale this book up and will be hiving off as separate NBFC but will remain part of the parent Fusion," Sachdev told news agency PTI over the weekend.
Those selling shares in the OFS are Devesh Sachdev (founder and chairman of the MFI), his wife Mini Sachdev, Honey Rose Investment and two funds of Creation Investments Fusion, the Dutch impact investor Oikocredit Ecumenical Development Co-operative Society, and Global Financial Inclusion Fund. Of these, Honey Rose and Creation Investments are funds owned by Warburg Pincus which entered the MFI in 2018 with a ₹520 crore funding.
Pre-offer Honey Rose Investment (Warburg) directly owns 48.65% in the company and the two Creation Investments Fusion funds, Oikocredit Ecumenical Development, and Global Financial Inclusion Fund holding another 36.56% and the Sachdevs 8.21%, taking the total to 85.21%. Post issue Warburg will pare 12% and Sachdevs under 1% to take their stake to 7.5%.
(With inputs from PTI)
