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Muthoot Finance Ltd.

Muthoot Finance is the largest gold financing company in India, providing personal and business loans secured by gold jewelry. It has been in business for over 70 years and emphasizes trust and customer protection. The company has expanded to include subsidiaries in microfinance, housing finance, insurance brokering, and international markets. Muthoot Finance has achieved significant growth and scale, with over 1,600 branches and a retail loan portfolio exceeding 7,400 crore rupees.

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Hrithik Saxena
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642 views

Muthoot Finance Ltd.

Muthoot Finance is the largest gold financing company in India, providing personal and business loans secured by gold jewelry. It has been in business for over 70 years and emphasizes trust and customer protection. The company has expanded to include subsidiaries in microfinance, housing finance, insurance brokering, and international markets. Muthoot Finance has achieved significant growth and scale, with over 1,600 branches and a retail loan portfolio exceeding 7,400 crore rupees.

Uploaded by

Hrithik Saxena
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Banking/Finance Industry

Muthoot Finance ltd.


“Let us not judge ourselves by the profit we make but by the trust and the confidence
that people have in us. Let us cherish and nurture that trust and ensure that every
person who deals with us deals with the confidence that he will not be misguided but his
interests will be carefully protected”.

Even before the word “ethos” found a place in the corporate lexicon, Muthoot Finance
Ltd. imbibed a work culture based on conscience. Since its inception, the company has
nurtured trust as its most prominent value. We are committed to keeping this heritage
alive throughout the generations to come.

At Muthoot Finance Ltd. we are committed to creating a balance. We believe in a simple


yet profound theory of “from excess or scanty, to appropriateness”. A prominent
example of this is our financial inclusion policy. The company provides gold loan on
extremely easy terms and conditions to people of each segment of the society. Our gold
loan range begins from Rs. 1500 and there is no maximum limit. Driven by the
invaluable trust and commitment that people have shown in us through centuries, we
created a reputable market image.
History
Muthoot Finance Limited is the largest gold financing company in India in terms of loan
portfolio. The company provides personal and business loans secured by gold jewellery
or Gold Loans primarily to individuals who possess gold jewellery but could not access
formal credit within a reasonable time or to whom credit may not be available at all to
meet unanticipated or other short-term liquidity requirements. The company is
headquartered in Kerala. The company's wholly-owned subsidiary Muthoot Insurance
Brokers Pvt Limited (MIBPL) is licensed as a direct broker by IRDAI since 2013 and is
actively distributing both life and non-life insurance products of various insurance
companies. Muthoot Finance's another wholly-owned subsidiary Muthoot Homefin
(India) Limited is a housing finance company with a focus on affordable housing
finance. Muthoot Finance's subsidiary Belstar Investment and Finance Private Limited
(BIFPL) is a microfinance company. Muthoot Finance holds 66.61% of equity share
capital of BIFPL. Muthoot Finance's foreign subsidiary Asia Asset Finance PLC (AAF)
Colombo is involved in Retail Finance Hire Purchase & Business Loans. Muthoot
Finance Ltd was incorporated on March 14 1997 as a private company with the name
The Muthoot Finance Pvt Ltd. The company is promoted by M G George Muthoot
George Thomas Muthoot George Jacob Muthoot and George Alexander Muthoot. The
company's operating history evolved over a period of 70 years since M George Muthoot
(the father of the promoters) founded a gold loan business in 1939 under the heritage of
a trading business established by his father Ninan Mathai Muthoot in 1887.In the year
2001 the company obtained the license from RBI to function as an NBFC. In the year
2005 as per the scheme of amalgamation Muthoot Enterprises Private Ltd was
amalgamated with the company with effect from March 22 2005. In May 16 2007 the
name of the company was changed from The Muthoot Finance Pvt Ltd to Muthoot
Finance Pvt Ltd. During the year 2008-09 the company opened 278 new branches
across various states. Also they opened regional offices in Sales and Visakhapatnam.
In November 18 2008 the company was converted into public limited company and the
name was changed to Muthoot Finance Ltd. They obtained fresh RBI license to function
as an NBFC without accepting public deposits consequent to change in name. During
the year 2009-10 the company added 620 new branches. As per the scheme of de-
merger the radio business of the company was de-merged and transferred to Muthoot
Broadcasting Pvt Ltd with effect from January 01 2010.The company opened 316 new
branched between April 2010 to August 2010. During the year 2010 the company's
branch network crossed 1600 branches retail loan portfolio crossed Rs 7400 crore retail
debenture portfolio crossed Rs 2700 crore net owned funds crossed Rs 500 crore gross
annual income crossed Rs 1000 crore and bank credit limits crossed Rs 1700 crore.

SWOT ANALYSIS
Strengths
 Consistent Highest Return Stocks over Five Years - Nifty500
 Bullish Engulfing Pattern (Bullish Reversal)
 Overbought by Money Flow Index (MFI)
 Growth in Quarterly Net Profit with increasing Profit Margin (YoY)
 Increasing Revenue every quarter for the past 2 quarters
 Annual Net Profits improving for last 2 years
 Book Value per share Improving for last 2 years
 Company with Zero Promoter Pledge
 Near 52 Week High
 Stock gained more than 20% in one month
 Strong Momentum: Price above short, medium and long term moving averages
Weakness
 Companies with growing costs YoY for long term projects
 MFs decreased their shareholding last quarter
 Inefficient use of capital to generate profits - RoCE declining in the last 2 years
 Decline in Net Profit (QoQ)
 Decline in Net Profit with falling Profit Margin (QoQ)
 Companies with High Debt
 Promoter decreasing their shareholding
 Low Piotroski Score : Companies with weak financials

Opportunity
 30 Day SMA crossing over 200 Day SMA, and current price greater than open
 High Momentum Scores (Technical Scores greater than 50)
 Highest Recovery from 52 Week Low
 RSI indicating price strength
 Biggest Price Gainers from Open
 Stocks near 52 Week High with Significant Volumes

Threats
 Companies with high market cap, lower public shareholding
 Stocks with Expensive Valuations according to the Trendlyne Valuation Score
 Increase in Provisions in Recent Results
Competitors
Balance Sheet

Profit/Loss Account
Cash Flows

Conclusion
From the above competitors table we can see that Muthoot Finance ltd. have been
compared with other major six companies in India. From the table is clear that in all the
areas like market capital, sales turnover, net profit and also total asset, Muthoot Finance
have a very high position with a remarkable difference in their respective values. While
we analyze the competition we can determine that the company possess a dominancy
over the market. It is very difficult for the competitors to come over the Muthoot Finance
position. Considering the fact that the company profit is from the market it is important
for Muthoot Finance to maintain this status with more marketing strategies.

I have understood how Muthoot Finance ltd. have come up in such a highly competitive
market like in India and also they were able to establish their name in international
market also. Form this report we can see that the company is not just focusing on one
industry whereas it have many subsidiaries and associates which helping them to be
stable when the economy is down.

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