Muthoot Finance to Infuse Rs 500 Cr in Arm Muthoot Money

Key Takeaways from Muthoot Finance Infusion:

• Muthoot Finance has approved an additional equity infusion of Rs. 500 crore into its wholly-owned subsidiary, Muthoot Money Limited.
• The capital infusion aims to strengthen Muthoot Money's financial position and improve its capital adequacy ratio.
• The infusion will be made in cash and is expected to be completed within one month.
• Muthoot Money Limited, a non-banking financial services company, reported a turnover of Rs. 1,261.4 million in FY 2023-24.

The purpose of the capital infusion is to strengthen the financial position of Muthoot Money Limited and improve its capital adequacy ratio. The investment will be made in cash and is expected to be completed within one month. 

Muthoot Money Limited is a non-banking financial services company, headquartered in Kerala. Over the past three years, the company has shown steady growth, with a turnover of Rs. 1,261.4 million in FY 2023-24, up from Rs. 446.88 million in FY 2022-23.

As Muthoot Money is already a wholly-owned subsidiary, the additional equity infusion will not change the company’s shareholding structure. The transaction does not require any regulatory approvals.

About Muthoot Finance Limited:

Muthoot Finance Limited, a leading financial services company in India, boasts a legacy of over 800 years of trust and commitment. Established with the goal of providing accessible financial solutions, Muthoot Finance is recognised for having the largest gold loan portfolio in India. The company offers a wide range of services, including personal loans, housing finance, SME loans, vehicle loans, insurance, and mutual funds. With a strong focus on financial inclusion, Muthoot Finance serves millions of customers, maintaining a reputation for reliability and customer-centric solutions. The company continues to innovate, driven by technology and ethical business practices.

Key Takeaways from the Announcement

• Valor Estate sold a 22,135 sq. meter land parcel to Prestige Estate; proceeds were used to reduce significant debt.
• Horizontal Ventures Pvt. Ltd. took ₹20.17 crore from Man Vastucon LLP. This helped increase the revenue flow.
• Valor's Debt-to-Equity Ratio is now at 0.34x (0.23x for real estate), the lowest in the industry.

The land parcel measuring 22,135 square meters in Village Mahajanwadi, Thane district, was sold for ₹262.42 crore. This is a vital step for Valor Estate on its journey to attainment of reduced debt burdens.

Valor Estate's subsidiary, Horizontal Ventures Pvt. Ltd., has an economic interest of 92.85% and received an additional ₹20.17 crore from Man Vastucon LLP, which includes an ongoing revenue-sharing arrangement related to property.

The entire consideration has been received, allowing Horizontal to redeem Non-Convertible Debentures (NCDs) totalling ₹234.68 crore. This transaction has substantially reduced the company’s debt, bringing the standalone secured debt at Valor Estate to zero and the consolidated secured debt to ₹1,650 crore, including ₹535 crore from hospitality ventures. The company’s Debt-to-Equity Ratio, as of September 30, 2024, stands at 0.34x, or 0.23x specifically for the real estate business, positioning it among the lowest in the industry.

This sale aligns with Valor Estate's strategic objective to achieve a debt-free status at the consolidated level in the near future.

About Valor Estate Limited

The company was incorporated in 2007, and the principal business activity had been construction, development of real estate, and undertaking related activities. The projects were mostly located in and around Mumbai at different stages of planning and under construction.

Key Takeaways from the Financial Performance 

• Revenue reached ₹178.1 crore, an 8.8% increase quarter-over-quarter, showcasing strong performance.
• PAT increased by 9.3% QoQ, reaching ₹2.5 crore, with an EPS of ₹2.45, benefiting shareholders.
• Total revenue was ₹341.8 crore, a 0.8% YoY growth, with EBITDA steady at ₹30.9 crore, demonstrating robust operational efficiency.

The EBITDA for the quarter stood at ₹15.7 crore, maintaining a stable EBITDA margin of 8.8%. Profit After Tax (PAT) saw a 9.3% rise, reaching ₹2.5 crore, demonstrating effective cost management.

In H1 FY25, BSL achieved a total revenue of ₹341.8 crore, marking a 0.8% increase year-over-year, with steady operational efficiency as EBITDA remained at ₹30.9 crore. PAT for H1 FY25 stood at ₹4.8 crore, showcasing the company’s resilience and adaptability in the market. 

Speaking on the financial results, Mr. Nivedan Churiwal, Managing Director of BSL Limited, commented, “We are delighted to deliver strong financial results in Q2 FY25, with operating revenue reaching ₹178.1 crore, marking an 8.8% growth on a quarter-over-quarter basis. The company's EBITDA for Q2 FY25 totalled ₹15.7 crore, maintaining a stable EBITDA margin of 8.8%, highlighting BSL's consistent ability to manage operational expenses efficiently. For the quarter, PAT was ₹2.5 crore, reflecting a 9.3% increase from the previous quarter. The half-year FY25 revenue also climbed to ₹341.8 crore, up by 0.8% year-over-year, with EBITDA and PAT at ₹30.9 crore and ₹4.8 crore, respectively, demonstrating strong demand in the market and sound operational execution. We have successfully maintained our growth trajectory by expanding into new markets and strengthening connections with our current customer base, creating a strong foundation for further growth. We have a positive outlook for the upcoming quarter, anticipating improved performance in the domestic and international textile sector, and remain hopeful for continued advancement. Our commitment to enhancing shareholder returns remains unwavering, as we are well-equipped to seize emerging opportunities while adeptly addressing current challenges."

About BSL Limited

BSL Limited is a textile manufacturing company, founded in 1971. Since then, the organisation has grown into a fully integrated spinning, weaving, processing, and manufacturing setup. This year, the company will manufacture over 20 million meters of fabric for markets in India and over 60 other countries. BSL continues to be acknowledged for high-quality synthetic and worsted fabrics using the latest technology of the world to assure delivery of quality, BSL Suiting, and Geoffrey Hammonds. LNJ Bhilwara Group is a diversified conglomerate in which it has interests across textiles, energy, IT services, and more in equal measures.

Key Takeaways from Bharti Airtel Penalty:

• Bharti Airtel has been fined Rs. 2.26 lakh by the Department of Telecommunications (DoT) for violating subscriber verification norms.
• The penalty follows a DoT audit of Customer Acquisition Forms (CAFs) for September 2024.
• The violation pertains to non-compliance with subscriber verification terms in Airtel's Licence Agreement.
• The financial impact of the penalty is limited to Rs. 2.26 lakh, and Airtel will take appropriate actions as required.

The notice, received by the company on November 14, 2024, follows a sample audit of Customer Acquisition Forms (CAFs) conducted by the DoT for the month of September 2024.

The penalty relates to non-compliance with the subscriber verification terms and conditions set out in the company’s Licence Agreement. 

The financial impact of the penalty on the company is limited to the amount of Rs. 2.26 lakh, as per the notice. Airtel has acknowledged the penalty and will take necessary actions in accordance with the regulatory requirements. 

About Bharti Airtel Limited:

Airtel is the largest communications solutions provider with more than 550 million customers across 17 countries in South Asia and Africa. It ranks among the top three global mobile operators, covering over two billion people. The portfolio includes high-speed 4G/5G mobile broadband, Airtel Xstream Fibre, and various enterprise solutions.