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ESAF Small Finance Bank plans to float IPO in Q4

K Paul Thomas, managing director and CEO, said the business is back to normal and the bank will go ahead with the IPO by March.

The lender has more than 96% of its exposure to the micro segment, with the average ticket size of the loan being Rs 33,000.
The lender has more than 96% of its exposure to the micro segment, with the average ticket size of the loan being Rs 33,000.

ESAF Small Finance Bank on Thursday said it is planning to float its initial public offering (IPO) in the fourth quarter of the current fiscal. The Thrissur-based lender had filed the draft red herring prospectus in January and got approval from Sebi in the last week of March for a fresh issue worth Rs 800 crore and an offer for sale aggregating up to Rs 176.2 crore.

K Paul Thomas, managing director and CEO, said the business is back to normal and the bank will go ahead with the IPO by March.

“The bank has reported 41% year-on-year growth in net profits and our total business has grown by 35%. Both assets and liabilities have grown and our asset quality has improved. Overall business sentiments are also good and we think it is the right time for the IPO,” he said.

“Almost 100% of loan customers availed of the benefit of the moratorium in April and May and it gradually decreased to 80% in June-July. By August, it was down to 60%. If not for the RBI order on moratorium, loans worth Rs 10 crore would have slipped into NPA and we have provisioned proactively for it. Collections are also very good ,” Thomas said.

The lender has more than 96% of its exposure to the micro segment, with the average ticket size of the loan being Rs 33,000.

The provision coverage ratio is 93.45%, against 81.53% in the first half of FY20.

The bank is planning to open 50 branches in the current fiscal and hopes to have 535 branches by the end of the year.

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