Muthoot Microfin IPO Basis of Allotment

^^AFTER EMPLOYEE DISCOUNT.

1. The microfinance industry in India faces certain risks due to the category of customers that it services, (the primary focus customer segment for our micro-loan business is women with an annual household income of up to ^300,000) which are not generally associated with other forms of lending. As a result, we may experience increased levels of non-performing assets and related provisions and write-offs that may adversely affect our business, financial condition and results of operations. Our Loans written off, Collection Efficiency and Expected Credit Loss ("ECL") allowance percentage is as follows:

2. We will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the entire proceeds from the Offer for Sale.

3. Our business is vulnerable to interest rate risk, and volatility in interest rates could have an adverse effect on our net interest income and net interest margin, thereby affecting our results of operations. The table below sets forth our cost to income ratio for the Financial Years 2021,2022 and 2023, and the six months ended September 30,2022 and 2023:

*Cost to income ratio is the ratio of the aggregate of our fees and commission expenses, employee benefit expenses, operating expenses and depreciation and amortisation expense to total income net of finance cost as per our Restated Financial Statements for the relevant year/period.

4. The Directorate of Enforcement, Ministry of Finance, Government of India ("ED") has issued summons to our Managing Director directing him to provide certain information in relation to himself and our Company (in relation to a matter concerning the deposit of cash during the demonetization period). There is no assurance that the ED will not take any action against us or our Managing Director, which may adversely impact our business and operations, financial condition and reputation.

5. We derive a significant portion of our revenues from South India, and any adverse developments in the southern states of India may have an adverse effect on our business, results of operations, financial condition and cash flows. As of September 30, 2023, March 31,2023,2022 and 2021,52.37%, 55.96%, 64.81% and 66.72% of our Gross Loan Portfolio was derived from our branches in South India.

6. We may not be able to sustain the significant growth in our business and relatively high profit after tax that we recorded for the Financial Year 2023 in the future. Our revenue from operations and profit after tax were as follows:

7. As a non-banking financial company - microfinance institution, we are subject to periodic inspections by the Reserve Bank of India. Non-compliance with observations made by the Reserve Bank of India during these inspections could expose us to penalties and restrictions. While we have responded to such observations and addressed them, we cannot assure you that the RBI will not make similar or other observations including divergences in the future that will financially impact our business and operations.

8. The market capitalization to revenue, market capitalisation to tangible assets, and enterprise value ("EV") to EBITDA, based on the Offer Price of our Company, may not be indicative of the market price of our Company on listing or thereafter.

Further, our EV to EBITDA ratio is 5.99 times for Financial Year 2023.

9. Weighted Average Cost of Acquisition at Floor and Cap Price

10. Weighted Average Return on Net Worth for Fiscals 2023,2022 and 2021 is 6.35%.

11. Weighted average cost of acquisition per Equity Share transacted in one year, eighteen months and three years preceding the date of the Prospectus:

*As certified by Rangamani & Co., Chartered Accountants by way of their certificate dated December 12,2023.

12. We have issued CCPS to Greater Pacific Capital WIV Ltd pursuant to allotments between December 2021 to September 2022 at a price that may be lower than the Offer Price.

13. Average cost of acquisition of Equity Shares for the Selling Shareholders are ranging from ?90.74 to ?165.40 and Offer Price at upper Price Band is ?291.00.

14. The four BRLMs associated with the Offer have handled 93 public Issues in the past three financial years, out of which 25 Issues closed below the offer price on listing date:

Issues handled where there were no common BRLMs

This Offer was made in terms of Rule 19(2)(b) of the SCRR read with Regulation 31 of the SEBI ICDR Regulations. The Offer is being made through the Book Building Process and is in compliance with Regulation 6(1) of the SEBI ICDR Regulations wherein in terms of Regulation 32(1) of the SEBI ICDR Regulations, not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs". and such portion, the "QIB Portion" ) provided that our Company, acting through its IPO Committee in consultation with the BRLMs, may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations ("Anchor Investor Portion"), of which at least one-third shall be available for allocation to domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. Further. 5% of the Net QIB Portion shall be available for allocation on a proportionate basis only to Mutual Funds and the remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors) including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the remaining QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer shall be available for allocation to Non-lnstitutional Bidders out of which (a) one-third of such portion shall be reserved for applicants with application size of more than ? 200.000 and up to ?1,000,000; and (b) two-third of such portion shall be reserved for applicants with application size of more than ?1.000.000, provided that the unsubscribed portion in either of such sub-categories may be allocated to applicants in the other sub-category of Non-lnstitutional Bidders and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Bidders ('RIBs') in accordance with the SEBI ICDR Regulations, subject to valid Bids being received from them at or above the Offer Price. Further. Equity Shares will be allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. All potential Bidders (except Anchor Investors) are required to mandatorily utilise the Application Supported by Blocked Amount ("ASBA") process by providing details of their respective bank accounts (including UPI ID for UPI Bidders using UPI Mechanism) (as defined hereinafter) in which the Bid amount will be blocked by the SCSBs or the Sponsor Banks, as applicable, to participate in the Offer. Anchor Investors are not permitted to participate in the Anchor Investor Portion of the Offer through the ASBA process. For details, see ' Offer Procedure' on page 471 of the Prospectus.

The bidding for Anchor Investor opened and closed on Friday. December 15, 2023. The company received 26 applications from 22 anchor investors for 10,996.620 Equity Shares. The Anchor investor price was finalized at Rs. 291 per Equity Share. A total of 9,793,812 shares were allocated under the Anchor Investor Portion aggregating to Rs. 2.849,999,292/-

The Offer received 1,542,800 applications for 294,245,979 Equity Shares (prior to technical rejections) resulting in 8.91 times subscription. The details of the applications received in the Offer from various categories are as under; (before technical rejections):

Final Demand

A summary of the final demand as per BSE and NSE as on the Bid/Offer Closing Date and as at different Bid prices is as under:

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being BSE on December 21.2023.

A. Allotment to Retail Individual Bidders (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Retail Individual Bidders, who have bid at the Cut-Off Price or at the Offer Price of Rs. 291 per Equity Share, was finalized in consultation with the BSE. This category has been subscribed to the extent of 7,81895 times. The total number of Equity Shares Allotted in Retail Portion is 11,426,116 Equity Shares to 224,041 successful Retail Individual Bidders. The category-wise details of the Basis of Allotment are as under:

Please Note : 1 additional Share shall be allotted to 25 Allottees from amongst 18,249 Successful Applicants from the categories 102-663 (i.e. excluding successful applicants from Category 51) in the ratio of 25:18249

B. Allotment to Non-lnstitutional Bidders (more than Rs. 0.20 million and up to Rs. 1.00 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs. 0.20 million Up to Rs. 1.00 million), who have bid at the Offer Price of Rs. 291 per Equity Share or above, was finalized in consultation with BSE. This category has been subscribed to the extent of 15.54939 times. The total number of Equity Shares allotted in this category is 1,632,303 Equity Shares to 2,286 successful applicants. The category-wise details of the Basis of Allotment are as under:

Please Note: 1 (One) lot of 714 shares have been allotted to All the Applicants from Serial No. 48 to 51 in the ratio of 1:12 (All these categories have been moved at the end for easy reference)

Please Note : 1 additional Share shall be allotted to 99 Allottees from amongst 189 Successful Allottees from Serial No. 2 to 51 (i.e. excluding successful applicants from Category 714) in the ratio of 11:21.

C. Allotment to Non-lnstitutional Bidders (more than 71.00 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs. 1.00 million), who have bid at the Offer Price of Rs. 291 per Equity Share or above, was finalized in consultation with BSE. This category has been subscribed to the extent of 12.60540 times. The total number of Equity Shares allotted in this category is 3,264,604 Equity Shares to 4,572 successful applicants. The category-wise details of the Basis of Allotment are asunder: (Sample)

Please Note: 1 (One) lot of 714 shares have been alloted to All the Applicants from Sehal No. 57 to 107 in the ratio of 6:17 (All these categories have been moved at the end for easy reference)

Please Note: 1 additional Share shall be allotted to 196 Allottees from amongst 4.572 Successful Applicants from all the categories in the ratio of 49:1143.

D. Allotment to Employee Reservation (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Eligible Employee Portion, who have bid at the Offer Price net of Employee Discount, i.e. ?277 per Equity Share was finalized in consultation with BSE. This category has been subscribed to the extent of 1.07591 times. The total number of Equity Shares allotted in this category is 361,010 Equity Shares to 1,633 successful applicants.

Allotment under the Eligible Employee Category have been split in 2 categories (i) applications upto 2 Lakhs (ii) applications above 2 Lakhs and up to 5 Lakhs.

The category-wise details of the Basis of Allotment for Employee up to ? 0.20 million are as under:

The category-wise details of the Basis of Allotment for Employee above Rs. 0.20 million and up to Rs. 0.50 million are as under:

E. Allotment to QIBs (After Rejections)

Allotment to QIBs, who have Bid at the Offer Price of Rs. 291 per Equity Share or above, has been done on a proportionate basis in consultation with the BSE. This category has been subscnbed to the extent of 18.25890 times of QIB Portion. As per the SEBI Regulations. Mutual Funds were Allotted 5% of the Equity Shares of QIB Portion available i.e., Nil Equity Shares and other QIBs and unsatisfied demand of Mutual Funds were Allotted the remaining available Equity Shares i.e., 6,529,209 Equity Shares (including spilled over of 326,461 Equity Shares from QIB Mutual Funds) on a proportionate basis. The total number of Equity Shares Allotted in the QIB Portion is 6,529,209 Equity Shares, which were allotted to 38 successful QIB Bidders. The category-wise details of the Basis of Allotment are as under:

Unsubscribed portion of QIB MF 326,461 Equity shares were spilled over to Other QIB category

F. Allotment to Anchor Investors (After Rejections)

The Company, in consultation with the BRLMs, has allocated 9,793,812 Equity Shares to 22 Anchor Investors (through 26 Applications) at the Anchor Investor Offer Price of Rs. 291 per Equity Share in accordance with the SEBI Regulations. This represents 60% of the QIB Portion.

The IPO Committee of our Company on December 21, 2023 has taken on record the Basis of Allotment of Equity Shares approved by the Designated Stock Exchange, being BSE and has allotted the Equity Shares to various successful Bidders. The Allotment Advice-cum- Intimations and/ or notices will be dispatched to the address of the investors as registered with the depositories. Further, the instructions to the Self Certified Syndicate Banks for unblocking of funds, transfer to Public Issue Account have been issued on December 21, 2023 and payment to non-Syndicate brokers have been issued on December 22, 2023. In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares Allotted to the successful Allottees have been uploaded on December 22, 2023 for credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Company has filed the Listing application with BSE and NSE on December 22, 2023. The Company has received listing and trading approval from BSE and NSE and the trading will commence on December 26, 2023

Note: All capitalised terms used and not specifically defined herein shall have the same meaning as ascribed to them in the Prospectus.

The details of the allotment made will be hosted on the website of the Registrar to the Offer, KFin Technologies Limited at www.kfintech.com All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First / Sole Bidder. Bid cum Application Form number, Bidder DP ID. Client ID, PAN. date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for. the name and address of the Designated Intermediary where the Bid cum Application Form was submitted by the Bidder and a copy of the Acknowledgment Slip received from the Designated Intermediary at the address given below:

	KFin Technologies Limited
	Selenium, Tower-B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Serilingampally. Rangareddy - 500 032. Telangana. India.
	Telephone: +91 40 6716 2222; E-mail: muthoot.ipo@kfintech.com
	Investor grievance e-mail: einward.ris@kfintech.com; Website: www.kfintech.com
	Contact Person: M. Murali Krishna
	SEBI Registration No.: INR000000221

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF MUTHOOT MICROFIN LIMITED.

MUTHOOT MICROFIN LIMITED has filed the Prospectus dated December 21, 2023 with RoC. The Prospectus shall be available on the website of SEBI at www.sebi.gov.in. websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com. respectively, and is available on the websites of our Company at https://muthootmicrofin.com/ offerdocument-related-filings/ and websites of the BRLMs. i.e. ICICI Securities Limited. Axis Capital Limited. JM Financial Limited and SBI Capital Markets Limited at www.icicisecurities.com.www.axiscapital.co.in.www.jmfl.com and www.sbicaps.com respectively. Any potential investors should note that investment in equity shares involves a high degree of risk and for details relating to such risk, please see the section entitled 'Risk Factors on page 31 of the Prospectus.

The Equity Shares offered in the Offer have not been, and will not be. registered under the United States Secunties Act of 1933, as amended (the Securities Act") or any state securities laws in the United States, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to. the registration requirements of the Securities Act. and applicable state securitities laws in the United States. Accordingly, the Equity Shares are being offered and sold (i) within the United States solely to persons who are reasonably believed to be "qualified institutional buyers' (as defined in Rule 144A under the Securities Act) under Section 4(a) of the Securities Act. and (ii) outside the United States in ‘offshore transactions" as defined in and in compliance with Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. There will be no public offering of Equity Shares in the United States.