Muthoot Microfin Limited disclosed a joint public notice issued by its holding company, Muthoot Fincorp Limited, and other entities regarding proposed changes in shareholding. The notice outlines a two-phase transfer of shares to promoter trusts, subject to regulatory approvals from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The transactions are part of succession planning and are intended to safeguard the interests of the Muthoot family and the company.

Proposed Transactions

The Individual Promoters and certain Promoter Group members intend to transfer their shareholding in Muthoot Fincorp Limited to the Transferees. The process involves an inter-se transfer of equity shares by way of gift amongst the Individual Promoters and Promoter Group Members, followed by a transfer of equity shares by way of gift from the Individual Promoters and Promoter Group Members to the respective Promoter Trusts. This is referred to as the Phase 1 Transfers.

The second phase involves the conversion of 56,000,000 compulsorily convertible preference shares of face value ₹ 10 each into equity shares of face value of ₹ 2 each. These resultant equity shares will be gifted to specific individuals who shall further gift them to the respective trusts prior to the filing of the red herring prospectus for the Proposed IPO by Muthoot Fincorp Limited.

Regulatory Approvals and Conditions

The changes in shareholding would result in an acquisition or transfer of shareholding of 26% or more of the paid-up equity capital of Muthoot Fincorp Limited. The RBI granted its approval for the Proposed Transactions via a letter dated July 20, 2026. The Phase 1 Transfers will be undertaken after the expiry of at least seven days from the date of publication of the notice.

The Transferees have applied to SEBI for an exemption under Regulation 11(i) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 2011. This exemption is sought from complying with the requirements of regulation 3, 4, and 5 of the SAST Regulations regarding the indirect acquisition of shares and voting rights in Muthoot Microfin Limited. The Proposed Transactions are subject to this approval by SEBI, and the notice shall stand withdrawn if the exemption is not approved.

Shareholding Structure

The following table details the proposed shareholding structure following the transactions:

The Phase 2 Transfers shall be undertaken subsequently prior to the filing of the red herring prospectus with the Registrar of Companies in relation to the Proposed IPO by Muthoot Fincorp Limited. Any person seeking clarification or having objections to the change in shareholding may write to the company within seven days from the date of publication of the notice.

Muthoot Microfin Limited has filed its Business Responsibility and Sustainability Report (BRSR) for the financial year 2025-26 with BSE Limited and the National Stock Exchange of India Limited. The filing, submitted by Chief Compliance Officer and Company Secretary Neethu Ajay, outlines the company's adherence to the National Guidelines on Responsible Business Conduct (NGRBC) and details its environmental, social, and governance (ESG) performance. The report highlights the company's strategic focus on financial inclusion, aiming to reach and impact 10 million households by 2030.

The company reported a turnover of ₹ 23,80,69,65,621 and a net worth of ₹ 28,54,31,16,238 for the financial year. Its primary business activity, onward lending of microfinance loans, accounted for 93% of the total turnover. Operations are spread across 21 states with 1,670 offices, serving financially underserved women in rural and semi-rural India through Joint Liability Groups and individual loans.

Governance and Oversight

The Board of Directors established an ESG/Sustainability Committee on December 19, 2024, to strengthen governance of the ESG agenda. Mr. Thomas Muthoot serves as the Director responsible for implementation. The company confirmed that policies covering all nine NGRBC principles have been approved by the Board. An independent assessment by CareEdge Advisory evaluated the company's policy framework against BRSR requirements, resulting in an ESG score of 80.8 and a CareEdge-ESG 1+ rating.

Social Performance

The report details comprehensive measures for employee well-being, with 100% of permanent employees covered by health and accident insurance. The company recorded 368 employee grievances during the year, all of which were resolved. On the customer front, the company operates a three-tier grievance redressal mechanism, receiving 3,527 complaints in 2025-26, with 416 pending resolution at the end of the year. This was an improvement from the previous year, which saw 1,467 complaints and 38 pending resolutions.

Environmental Initiatives

Muthoot Microfin reported several initiatives to reduce its environmental footprint, including upgrading solar-enabled branches from 48 to 56. The company reduced paper usage by 90% through digitisation and replaced older printers with energy-efficient inkjet models. Waste management data indicated a total waste generation of 10.70 metric tonnes for the year, comprising 0.76 metric tonnes of e-waste and 4.58 metric tonnes of battery waste, all processed through certified recyclers.

The company disclosed a monetary penalty of ₹ 40,08,000 paid to the Employees’ Provident Fund Organisation (EPFO) towards penal damages and interest under Sections 14B and 7Q of the EPF Act. No appeal was preferred against this order.