Ujjivan Small Finance Bank has raised ₹250 crore in a pre-initial public offering (IPO) round led by India Infoline (IIFL) group’s funds, a private equity fund of Avendus Capital and Akash Bhanshali of Enam Group. The pre-IPO round closed on Wednesday.
The lender’s filings with the registrar of companies (RoC) shows that funds managed by IIFL invested around ₹136 crore in the pre-IPO round.
The IIFL funds which participated in the investment include IIFL special opportunities fund, a dedicated pre-IPO fund managed by the group’s asset management business, IIFL long term equity growth fund and IIFL blended fund, the filing shows.
Avendus Capital, through its Future Leaders Fund, a private equity fund, invested ₹32.5 crore, while Bhanshali invested ₹25 crore. Several other HNIs also participated in the round.
Shares were allocated to investors at a price of ₹35 each. According to a person aware of the investment details, the share sale values the company at around ₹5,000 crore.
With the pre-IPO funding concluded, the bank is expected to hit the markets soon with its public share sale.
“They are planning to launch the IPO by the end of the month or early December, most likely the latter,” said a second person, speaking on condition of anonymity.
Ujjivan Small Finance Bank (SFB) filed the draft prospectus for its public offering on 14 August. The bank plans to sell shares worth ₹1,200 crore through the IPO, according to the prospectus. Funds will be used for augmenting the bank’s capital base and future capital requirements. The bank received market regulator Securities and Exchange Board of India’s approval for its IPO on 22 October.
As of 30 June, the bank served 4.72 million customers. Its products include loans to its micro banking customers that include group loans and individual loans, agriculture and allied loans, SME loans, affordable housing loans, financial institutions group loans, personal loans and vehicle loans.
Ujjivan’s gross loan advances have grown from ₹6,383.9 crore as of 31 March 2017 to ₹11,048.5 crore as of 31 March 2019. Deposits have increased from ₹206.4 crore to ₹7,379.4 crore in the same period.
The bank’s parent Ujjivan Financial Services Ltd went public in 2016, after receiving an in-principle licence from the Reserve Bank of India to start a small finance bank. In September 2015, RBI issued 10 SFB licences.
In October, the Reserve Bank of India asked Equitas Holdings Ltd and Ujjivan Financial Services to list their SFB units to comply with its norms, which mandate that a small finance bank with a net worth of more than ₹500 crore must be listed within three years of the launch of operations. Further, it said the promoter shareholding should be brought down to 40% within five years of launch.
For Equitas and Ujjivan, it meant listing their SFBs by September 2019 and January 2020, respectively.
So far, only one small finance bank is directly listed on the stock exchanges.
In June 2017, Jaipur-based AU Small Finance Bank Ltd went public in a ₹1,900 crore IPO.
Several other such banks have also started planning for their initial public offerings. These include Fincare Small Finance Bank, which has appointed investment banks to start working on its proposed IPO of more than ₹1,000 crore, Kerala-based ESAF Small Finance Bank and Utkarsh Small Finance Bank, which is eyeing a ₹500 crore IPO, Mint reported on 18 September.
Shares of Ujjivan Financial Services rose 2.56% to ₹274.75 on BSE, while the benchmark Sensex gained 0.46% to 40,246.48 points.
Source: Mint