ESAF Small Finance Bank files Rs 998-cr IPO papers with SEBI; will join Ujjivan SFB, Equitas SFB upon listing

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July 27, 2021 2:40 PM

ESAF Small Finance Bank has filed a draft red herring prospectus (DRHP) with capital markets regulator SEBI to launch Rs 998-crore IPO.

ESAF Small Finance Bank, IPO, Ujjivan SFB, Equitas SFBESAF Small Finance Bank, in its DRHP, said that it might consider a pre-IPO placement of equity shares for an aggregate amount up to Rs 300 crore. Image: Reuters

ESAF Small Finance Bank has filed a draft red herring prospectus (DRHP) with capital markets regulator SEBI to launch Rs 998-crore IPO. The public issue comprises fresh issue of equity shares worth Rs 800 crore and an offer for sale (OFS) of Rs 197.78 crore by existing selling shareholders. Under the OFS, promoter will be selling shares worth Rs 150 crore, PNB MetLife would be offloading shares worth Rs 21.33 crore, Bajaj Allianz Life will offer shares of Rs 17.46 crore, PI Ventures will sell Rs 8.73 crore worth shares and John Chakola will offer shares worth Rs 26 lakh.

ESAF Small Finance Bank, in its DRHP, said that it might consider a pre-IPO placement of equity shares for an aggregate amount up to Rs 300 crore. If the pre-IPO placement is undertaken, the amount raised from such placement will be reduced from the fresh issue. Axis Capital, Edelweiss Financial Services, ICICI Securities and IIFL Securities have been appointed as merchant bankers to advise the bank on the IPO. Link Intime India Private Ltd will be the registrar to the issue. The equity shares are proposed to be listed on BSE and NSE.

On successfully completing its IPO, ESAF Small Finance Bank could join the industry-listed peers such as Suryoday Small Finance Bank, CreditAccess Grameen, Spandana Sphoorty Financial, Bandhan Bank, Ujjivan Small Finance Bank and Equitas Small Finance Bank. The weighted average return on net worth stood at 11.44 per cent, and the average industry peer group P/E ratio at 158.26x.

ESAF Small Finance Bank has planned to utilise the net proceeds from the fresh issue towards augmenting the Bank’s Tier – I capital base to meet its future capital requirements. Further, the proceeds from the fresh issue will also be used towards meeting the expenses in relation to the offer. It also expects to receive the benefits of listing the equity shares on the stock exchanges.

ESAF Small Finance Bank is one of the leading small finance banks in India in terms of client base size, yield on advances, net interest margin, assets under management compound annual growth rate (CAGR), total deposit CAGR, loan portfolio concentration in rural and semi-urban areas and the ratio of microloan advances to gross advances.

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