Utkarsh SFB IPO: Utkarsh Small Finance Bank has again filed preliminary papers with markets regulator Sebi, in which it has now cut its initial public offering (IPO) size to Rs 500 crore from the Rs 1,350 crore planned earlier. It has filed the draft papers again, as its earlier approval for the IPO got expired last month. Under the Sebi rules, a firm gets one year to hit the primary market after receiving approval from the market regulator, after which the approval expires.
Utkarsh SFB IPO Details
According to the fresh draft red herring prospectus (DRHP), Utkarsh SFB’s IPO size will be Rs 500 crore. It is a completely fresh issue of shares and the entire proceeds will go to the bank. The small finance bank might consider the issue of securities aggregating up to Rs 100 crore in a pre-IPO placement round. If such placement is undertaken, the fresh issue size will be reduced.
Proceeds from the fresh issue will be utilised to augment the lender’s tier 1 capital base to meet future capital requirements.
Utkarsh had earlier in March 2021 filed draft papers with Sebi to raise Rs 1,350 crore through the IPO. It was seeking the issuance of fresh shares amounting to Rs 750 crore and an offer for sale of up to Rs 600 crore. The lender had received Sebi’s go-ahead to float the IPO in June last year but didn’t launch the initial share sale.
ICICI Securities and Kotak Mahindra Capital Company are the book-running lead managers to the issue.
About Utkarsh SFB
Utkarsh SFB, which was incorporated in 2016, commenced operations in 2017. It offers a range of products, including saving accounts, salary accounts, current accounts, recurring and fixed deposits and locker facilities.
As of March 31, 2022, its operations are spread across 22 states and Union Territories with 686 banking outlets and 12,617 employees, serving 3.14 million customers majorly located in rural and semi-urban areas, primarily in Bihar, Uttar Pradesh and Jharkhand.
Utkarsh SFB’s Financials
Its gross loan portfolio grew from Rs 6,660.95 crore as of March 31, 2020, to Rs 10,630.72 crore as of March 31, 2022, and total deposits almost doubled from Rs 5,235.21 crore to Rs 10,074.18 crore during the period.
The lender posted a net profit of Rs 48.4 crore in the March 2022 quarter, after recording a Rs 24.6-crore loss in the December 2021 quarter. Its gross non-performing assets ratio stood at 6.10 per cent at the end of the reporting period. Net NPA was at 2.31 per cent. Its provision coverage ratio was 63.6 per cent.
(With inputs from PTI)
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