ESAF Small Finance Bank files draft papers for Rs 976-crore IPO

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Published: January 7, 2020 1:57:41 AM

The bank, in consultation with its Book Running Lead Managers (BRLMs) may consider a pre-IPO placement of up to Rs 300 crore. If it is undertaken, the amount raised will be reduced from the fresh issue, the DRHP states.

ESAF, Small Finance Bank, draft paper, IPO, DRHP, market newsThe IPO of the Kerala-based lender comprises a fresh issue worth Rs 800 crore and an ‘offer for sale’ (OFS) aggregating up to Rs 176.2 crore.

ESAF Small Finance Bank on Monday filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) of Rs 976 crore. The IPO of the Kerala-based lender comprises a fresh issue worth Rs 800 crore and an ‘offer for sale’ (OFS) aggregating up to Rs 176.2 crore.

The net proceeds from the fresh issue will be used to augment the bank’s Tier-1 capital (primarily loans/advances and investment portfolio) to meet future capital requirements.

The bank, in consultation with its Book Running Lead Managers (BRLMs) may consider a pre-IPO placement of up to Rs 300 crore. If it is undertaken, the amount raised will be reduced from the fresh issue, the DRHP states.

ESAF Small Finance Bank currently operates in 16 states and 1 Union territory through its 403 branches and 38 ultra-small branches, serving over 3.73 million customers. The bank’s net profit increased from Rs 24.60 crore in September 2018 to Rs 92.40 crore in September 2019 and the interest earned increased from Rs 472.258 crore in September 2018 to Rs 660.68 crore in September 2019.

The DRHP states that it will continue to focus on its rural and semi-urban franchisees and increase deposits across NRIs and CASA. As on date, it stands to have the highest share of retail deposits as a percentage to the total deposits compared to other small finance banks.

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