Fincare Small Finance Bank refiles draft papers for IPO

The bank plans to use the IPO proceeds for strengthening its tier-I capital base to meet future capital requirements.

SEBI IPO
ICICI Securities, Axis Capital, SBI Capital Markets and Ambit Pvt Ltd are the book running lead managers to the issue. (File)

By Shashank Didmishe

Bengaluru-based Fincare Small Finance Bank on Monday refiled the draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for its initial public offering. The new offer consists of a fresh issue of shares of up to Rs 625 crore and an offer-for-sale (OFS) of up to 1.7 crore shares by promoter and institutional investors.

The revised OFS consists of 1.49 crore shares by promoter Fincare Business Services, 4.71 lakh shares by Wagner Ltd, 4.44 lakh by private equity firm True North, 4.31 lakh shares by Indium IV (Mauritius) Holdings, 2.24 lakh shares by Omega TC Holdings, 1.31 lakh shares by LeapFrog Rural, 1.26 lakh shares by Kotak Mahindra Life Insurance, and 1.17 lakh shares by Edelweiss Tokio Life Insurance.

In the previous draft papers the lender had filed in 2021, the company was planning to raise Rs 330 crore via a fresh issue and the promoter Fincare Business Services was the sole selling shareholder with an OFS of Rs 1,000 crore.

The bank plans to use the IPO proceeds for strengthening its tier-I capital base to meet future capital requirements. The amount raised by the bank from the fresh proceeds will be deployed in FY23. The bank’s capital adequacy ratio as of March 31 stood at 22.32%, of which tier-I was 19.48%.

“In the coming quarters, our bank plans to significantly grow its loan advances which would require tier-I capital to comply with the applicable capital adequacy regulations,” the lender said in a draft papers.

The bank’s gross loan portfolio stood at Rs 7,599 crore as of March 31. The lender positions itself as a ‘digital-first’ bank and had started operations as microfinance lender in 2013 and received licence to operate as a small finance bank from the Reserve Bank of India (RBI) in 2016. The bank then changed its name from Disha Microfin to Fincare Small Finance Bank after receiving RBI approval.

The bank’s total deposits as of March 31 stood at Rs 6,455 crore, with current account, savings account (CASA) ratio at 36.30%. The bank plans to increase its deposit base by focusing on CASA and retail deposits.

ICICI Securities, Axis Capital, SBI Capital Markets and Ambit Pvt Ltd are the book running lead managers to the issue. 

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