Market regulator Securities and Exchange Board of India (SEBI) has exempted six promoter family trusts of the Muthoot family from making a mandatory open offer for the proposed indirect acquisition of shares and voting rights in Muthoot Microfin Ltd, paving the way for an internal restructuring aimed at succession planning and promoter shareholding reorganisation.
In
an order dated 3 August 2026, whole-time member (WTM) Kamlesh C Varshney granted exemption under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 to Thomas John Muthoot (MF) Trust, Thomas George Muthoot (MF) Trust, Thomas Muthoot (MF) Trust, Preethi John Muthoot (MF) Trust, Nina George Muthoot (MF) Trust and Remmy Thomas (MF) Trust. The exemption relates to the proposed indirect acquisition of shares and voting rights in Muthoot Microfin through changes to the ownership structure of the promoter entity, Muthoot Fincorp Ltd (MFL).
The regulator said the acquisition would ordinarily trigger the open offer requirements under Regulations 3, 4 and 5 of the Takeover Regulations because the trusts would indirectly acquire control over Muthoot Microfin. However, it granted relief after concluding that the transaction was an internal family restructuring without any effective change in control or management of the listed microfinance company.
According to the order, Muthoot Fincorp currently holds 85.59mn (million) shares, representing 50.21% of the equity capital of Muthoot Microfin. The six trusts will indirectly acquire this stake by acquiring 63.35% shareholding and control in Muthoot Fincorp through a series of transactions involving gifts of shares, transfers to family trusts and transfers following the conversion of compulsorily convertible preference shares (CCPS).
The restructuring will be implemented in multiple stages. Initially, the three promoter brothers—Thomas John Muthoot, Thomas George Muthoot and Thomas Muthoot—will transfer part of their Muthoot Fincorp shareholding by way of gift to their respective spouses. Subsequently, both the promoters and their spouses will transfer shares to their respective family trusts. After the conversion of CCPS into equity shares, additional shares allotted to the promoters will again be partly transferred to spouses and, ultimately, to the corresponding trusts.
SEBI noted that, despite the restructuring at the Muthoot Fincorp level, there would be no change in the shareholding pattern of Muthoot Microfin itself. The promoter and promoter group will continue to hold 55.47% in the listed company, while Muthoot Fincorp's 50.21% stake in Muthoot Microfin will remain unchanged. Public shareholding and non-promoter holdings will also remain unchanged.
The regulator accepted the applicants' contention that the proposed acquisitions are part of an internal family reorganisation intended to streamline succession planning and promote the welfare of members of the Muthoot family. The transfers are being undertaken through gifts among promoter family members and are not expected to prejudice the interests of public shareholders.
The exemption order also records that the restructuring plan was modified following Muthoot Fincorp's decision to pursue an initial public offering (IPO).
SEBI noted that Muthoot Fincorp's board approved the proposed IPO on 16 May 2026, and designated the three promoters, Preethi John Muthoot and the six family trusts, as promoters of the company. The revised structure was required because the earlier arrangement would not have satisfied the minimum promoter contribution requirements under the SEBI (Issue of Capital and Disclosure Requirements) Regulations after accounting for CCPS conversion.
To comply with IPO regulations, the three promoter brothers will continue to retain a combined 28.23% shareholding in Muthoot Fincorp, ensuring sufficient promoter shareholding for the proposed public issue, while the six trusts will collectively hold 63.35% of the company.
While granting the exemption, SEBI observed that the trusts are effectively a mirror image of the existing promoter holdings, with trustees comprising the promoter family members and beneficiaries limited to their immediate family and lineal descendants.
The regulator also noted that the proposed restructuring would not result in any effective change in voting control, beneficial ownership or management of Muthoot Microfin. The promoter family would continue to exercise control over the listed company even after the restructuring and the proposed IPO of Muthoot Fincorp. Public shareholding would remain unaffected and the company would continue to comply with minimum public shareholding norms.
SEBI made the exemption subject to several conditions, including compliance with the Companies Act and other applicable laws, submission of a post-acquisition report within 21 days of completion of the transaction, adherence to all disclosures and undertakings made in the exemption application and continued compliance with the conditions governing promoter family trusts under SEBI's master circular. The exemption is valid for one year from the date of the order, within which the proposed acquisition must be completed.
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