For an Rs500 crore IPO, Utkarsh Small Finance Bank resubmits its DRHP to SEBI

1 Aug 2022 , 09:07 AM

Utkarsh Small Finance Bank Ltd., situated in Varanasi, which among SFBs with AUM of more than Rs5000 crore had the second-fastest AUM growth between Fiscal 2019 and Fiscal 2022, has resubmitted its draught papers to the regulator in order to raise a total of Rs500 Cr through an IPO. The IPO consists of equity shares with a face value of Rs10 each; it is a completely new share issue, and the company will get all of the profits.

The offer is being made through the book-building process, and under that process, not more than 75% of the offer may be allocated to qualified institutional buyers, not more than 15% may be allocated to non-institutional bidders, and not more than 10% may be allocated to retail individual bidders.

The company may contemplate issuing securities ("Pre-IPO Placement") of up to Rs100 crore after consulting with the book-running lead managers. If such a pre-IPO placement is made, the size of the new offering will be smaller. The proceeds from the offering will be used to increase its tier 1 capital base in order to satisfy future capital requirements.

promoted by Utkarsh CoreInvest Limited, an NBFC that started operating in Fiscal 2010 and specialized in offering microloans to underserved and unserved markets, primarily in the states of Uttar Pradesh and Bihar. In April 2016, Utkarsh CoreInvest Limited established Utkarsh Small Finance Bank Limited as a wholly-owned subsidiary after acquiring RBI In-Principle Approval in October 2015 to create an SFB. After obtaining the RBI License in November 2016 to establish and operate as an SFB, Utkarsh CoreInvest Limited transferred its microfinance operations to its Bank, which began functioning in January 2017.

As of March 31, 2022, it had operations in 22 states and union territories, employing 12617 people to serve 3.14 million clients, the majority of whom lived in rural and semi-urban areas, mainly in the states of Jharkhand, Bihar, and Uttar Pradesh. In the same time frame, its retail term deposits and CASA as a percentage of total deposits were 37.28% and 22.37%, respectively. Savings accounts, salary accounts, current accounts, recurring and fixed deposits (with callable and non-callable choices), as well as locker facilities, are all included in its product line of deposit products. Additionally, it provides various liability products at affordable prices that are primarily aimed at retail customers from all market sectors, particularly older citizens, members of the middle class, as well as self-employed and salaried people.

Its total deposits nearly doubled from Rs5,235.21 crore as of March 31, 2020, to Rs10,074.18 crore as of March 31, 2022, while its gross loan portfolio increased from Rs6,660.95 crore as of March 31, 2020, to Rs10,630.72 crore.

The book running lead managers for the offer are ICICI Securities Limited and Kotak Mahindra Capital Company Limited, and the registrar is KFin Technologies Limited.