ESAF SFB likely to file fresh DRHP for its IPO

By: |
March 26, 2021 8:18 AM

ESAF Small Finance Bank is likely to file a fresh draft red herring prospectus (DRHP) for its initial public offering (IPO) with the market regulator Sebi.

K Paul ThomasK Paul Thomas, managing director and CEO, told FE that ESAF has time till July 2021 to list according to the guidelines of RBI .

ESAF Small Finance Bank is likely to file a fresh draft red herring prospectus (DRHP) for its initial public offering (IPO) with the market regulator Sebi.

The Thrissur-based lender had filed DRHP in January 2020 and got approval from Sebi in the last week of March for a fresh issue worth Rs 800 crore and an offer for sale (OFS) aggregating up to Rs 176.2 crore. K Paul Thomas, managing director and CEO, told FE that ESAF has time till July 2021 to list according to the guidelines of RBI .

“The validity of the current DRHP ends by March 2021. We will soon file a fresh DRHP. However, we are also looking at a policy change from the regulator that will allow us another three years time to list.The internal working group of the RBI has recommended easier guidelines for listing of small finance banks,” he added.

The internal working group of the RBI had recommended in November 2020 that existing payments banks and small finance banks should list within six years from the date of reaching net worth of Rs 500 crore or 10 years from the date of commencement of operations, whichever is earlier.

Thomas added that business is back to normal for the lender and the liability and assets have grown by 21% (till February) when compared year-on-year (y-o-y).

The bank reported a net profit of Rs 130.42 crore for the first half of FY21, an increase of 41% over the year-ago period.

Gross NPAs as a percentage of gross advances decreased from 1.76% as on September 30, 2019 to 1.32% as on September 30, 2020 and net NPAs as a percentage of net advances declined from 0.62% to 0.19%. “We have restructured loans worth Rs 17 crore in the retail and home loan sector.More than 87% of our loans is in the micro and small segment and we don’t have much slippages,” he added.

The provision coverage ratio is 93.45% as on September 30, 2020, against 81.53% in the first half of FY20.

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