ESAF Small Finance Bank :Files DRHP
for IPO
Kerala based ESAF Small Finance Bank on Monday filed its Draft
Red Herring Prospectus (DRHP) with markets regulator Securities and Exchange
Board of India for an Rs 976 crore Initial Public Offering (IPO).
According to the DRHP, the IPO comprises of a fresh issue worth Rs
800 crore and an Offer for Sale (OFS) aggregating up to Rs 176.2 crore.
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.
The BRLMs to the offer are Axis Capital Limited, Edelweiss
Financial Services Limited, ICICI Securities Limited and IIFL Securities
Limited.
Retail individual bidders
According to the DRHP, not less than 75%t of the offer will be
available for allocation to qualified institutional buyers (QIBs). Further, not
more than 15% of the offer will be available for allocation on a proportionate
basis to non-institutional bidders and not more than 10% of the offer will be
available for allocation to retail individual bidders.
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.
One of the leading small finance banks in terms of yield on
advances, AUM growth rate and share of retail deposits as per a CRISIL report,
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.
Microfinance loans accounted 95.75 per cent of the total gross
advances, it’s loan book outside Kerala has grown from Rs 5490 million in March
2017 to Rs 25,402.45 million as at September 30, 2019 which is 48.46 per cent
of the total microfinance loan book size, while the total gross advance as at
September 30, 2019 stood at Rs 54,742.35 million
The bank’s net profit increased from Rs 240.60 million in
September 2018 to Rs 924.40 million in September 2019 and the interest earned
increased from Rs 4722.58 million in September 2018 to Rs 6606.83 million 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 when compared to the other small finance banks.
IPO DRHP Link : https://www.axiscapital.co.in/uploads/equity_documents/20200106175939_esaf_small_finance_bank_limited__drhp.pdf
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