Ujjivan Financial Services has decided to dilute about 13-15% of its stake in Ujjivan Small Finance Bank to raise about Rs 1000-1200 crore through share sale via initial public offer (IPO) and other instruments in the next six months, indicating that it expects a post-issue valuation higher that of the holding company’s.
The post issue valuation of the bank would be around Rs 8500 crore. Ujjivan Financial Services’ current market capitalization is Rs 3360 crore at Rs 276.65 per share.
The IPO will be preceded by share sale via Employee Stock Purchase Scheme (ESPS), Ujjivan Small Finance Bank Managing Director Samit Ghosh said. It is also exploring a pre-IPO issue.
Ujjivan Financial Services, which is listed, is the holding company and 100% owner of the bank. RBI’s licensing agreement mandates the bank to get listed as well within three years of operation with the deadline expiring in January next year. Promoters of small finance bank including Ujjivan had earlier lobbied with regulator for reverse merger with the bank to protect their shareholders value because the holding companies has barely any financial assets other than what the banks have.
“We have decided to dilute about 10% of the stake in the bank through IPO which is minimum required at the time of listing,” Ghosh told ET. “This would impact the existing shareholders of Ujjivan Financial Services the least. Total dilution would be about 13-15%,” he said.
After the listing exercise which is likely to be over by January next year, the promoter will have to bring down stake to 40% by January 2022.
