Utkarsh Small Finance Bank gets SEBI nod for IPO; offer entirely fresh issue of Rs 500 | The Financial Express

Utkarsh Small Finance Bank gets SEBI nod for IPO; offer entirely fresh issue of Rs 500

Varanasi-based Utkarsh Small Finance Bank has received Securities and Exchange Board of India (SEBI) nod for Rs 500 crore IPO.

Utkarsh Small Finance Bank gets SEBI nod for IPO; offer entirely fresh issue of Rs 500
The Utkarsh Small Finance Bank IPO comprises equity shares of face value of Rs 10 each, and is a complete fresh issue of shares

Varanasi-based Utkarsh Small Finance Bank has received the Securities and Exchange Board of India (SEBI) nod for Rs 500 crore IPO (Initial Public Offering.) The IPO comprises equity shares of face value of Rs 10 each, and is a complete fresh issue of shares. The entire proceeds will go to the company, according to the Draft Red Herring Prospectus (DRHP). The small finance bank may consider issue of securities aggregating up to Rs 100 crore in a pre-IPO placement round. If such a placement is undertaken, the fresh issue size will be reduced. ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers of the IPO, while KFin Technologies is the registrar to the offer.

Earlier this year, in consultation with its lead managers, the lender slashed its IPO size by nearly 63%. Earlier, Utkarsh SFB planned to raise Rs 1,350 crore from IPO which included a fresh issue of Rs 750 crore and an offer for sale (OFS) of up to Rs 600 crore. However, according to the revised draft, the IPO is now an entire fresh issue of Rs 500 crore. Of the total size, 75% of the IPO will be allocated to qualified institutional buyers, while 15% will be reserved for non-institutional investors and the remaining 10% of the size will be allocated to retail individual investors.

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The lender which filed fresh DRHP with the markets regulator in August, obtained its observation letter on 21 October, an update with the Securities and Exchange Board of India (Sebi) showed. In Sebi’s parlance, obtaining its observation letter implies SEBI’s approval to launch the IPO.

The lender is promoted by Utkarsh CoreInvest Ltd, which commenced its operations as an NBFC in FY10. The company focuses on providing microfinance to the unserved and underserved segments, particularly in the states of Uttar Pradesh and Bihar, according to the CRISIL report stated in the DRHP. Between FY19-22, Utkarsh Small Finance Bank recorded the second fastest AUM growth. As on 31 March 2022, the small finance banks operations serviced 22 states through 686 banking outlets majorly located in rural and semi urban areas primarily in the states of Bihar, Uttar Pradesh and Jharkhand.

Utkarsh Small Finance Bank’s gross loan portfolio grew from Rs 6,660.95 crore as of 31 March 2020 to Rs 10,630.72 crore as of 31 March 2022 and total deposits almost doubled from Rs 5,235.21 crore in the same period. Net profit of the small finance bank rose 443.35% to Rs 89.49 crore in the quarter ended June 2022 as against Rs 16.47 crore during the previous quarter ended June 2021. Total income rose 39.66% to Rs 655.33 crore in the quarter ended June 2022 as against Rs 469.23 crore during the previous quarter ended June 2021.

Utkarsh Small Finance Bank has received the Securities and Exchange Board of India (SEBI) nod for Rs 500 crore IPO (Initial Public Offering.) The IPO comprises equity shares of face value of Rs 10 each, and is a complete fresh issue of shares. The entire proceeds will go to the company, according to the Draft Red Herring Prospectus (DRHP). The small finance bank may consider issue of securities aggregating up to Rs 100 crore in a pre-IPO placement round. If such a placement is undertaken, the fresh issue size will be reduced. ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers of the IPO, while KFin Technologies is the registrar to the offer.

Earlier this year, in consultation with its lead managers, the lender slashed its IPO size by nearly 63%. Earlier, Utkarsh SFB planned to raise Rs 1,350 crore from IPO which included a fresh issue of Rs 750 crore and an offer for sale (OFS) of up to Rs 600 crore. However, according to the revised draft, the IPO is now an entire fresh issue of Rs 500 crore. Of the total size, 75% of the IPO will be allocated to qualified institutional buyers, while 15% will be reserved for non-institutional investors and the remaining 10% of the size will be allocated to retail individual investors.

The Varanasi-based lender which filed fresh DRHP with the markets regulator in August, obtained its observation letter on 21 October, an update with the Securities and Exchange Board of India (Sebi) showed. In Sebi’s parlance, obtaining its observation letter implies SEBI’s approval to launch the IPO. The lender is promoted by Utkarsh CoreInvest Ltd, which commenced its operations as an NBFC in FY10. The company focuses on providing microfinance to the unserved and underserved segments, particularly in the states of Uttar Pradesh and Bihar, according to the CRISIL report stated in the DRHP. Between FY19-22,

Utkarsh Small Finance Bank recorded the second fastest AUM growth. As on 31 March 2022, the small finance banks operations serviced 22 states through 686 banking outlets majorly located in rural and semi urban areas primarily in the states of Bihar, Uttar Pradesh and Jharkhand. Utkarsh Small Finance Bank’s gross loan portfolio grew from Rs 6,660.95 crore as of 31 March 2020 to Rs 10,630.72 crore as of 31 March 2022 and total deposits almost doubled from Rs 5,235.21 crore in the same period.

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Net profit of the small finance bank rose 443.35% to Rs 89.49 crore in the quarter ended June 2022 as against Rs 16.47 crore during the previous quarter ended June 2021. Total income rose 39.66% to Rs 655.33 crore in the quarter ended June 2022 as against Rs 469.23 crore during the previous quarter ended June 2021.

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First published on: 27-10-2022 at 10:11 IST