ESAF Small Finance Bank has raised ₹135.15 crore from anchor investors ahead of its initial public offering (IPO) that opens for public subscription today, November 3, 2023. The IPO of the small finance bank, which is a mix of fresh issuance of equity shares and an offer for sale by existing shareholders, will close on November 7, while shares are slated to be listed on the domestic bourses on November 16. The price band for the offer has been fixed at ₹57-60 per share, which will fetch ₹463 crore at the upper end of the issue price.
The anchor book, which opened for a day on November 2, saw participation from foreign and domestic institutional investors. The company allotted 2,25,24,998 equity shares at the upper end of the price band at ₹60 per share to anchor investors, including BNP Paribas Arbitrage, Copthall Mauritius, Founders Collective Fund, ACM Global VCC Fund, Kotak Mahindra Life Insurance, Edelweiss Tokyo Life Insurance, ICICI Prudential Life Insurance, SBI Genral Life Insurance, Ananta Capital Ventures Fund, Astorne Capital VCC, and Alchemie Ventures Fund.
The bank’s public Issue of face value of ₹10 per equity share comprises of fresh issuance of equity shares worth ₹390.70 crore and an offer for sale (OFS) of up to ₹72.30 crore, aggregating to Rs 463 crore.
As per the document filed with the capital market regulatory SEBI, the company has reserved half of the issue for qualified institutional buyers (QIBs), up to 15% for non-institutional investors (NIIs), and remaining 35% for retail individual bidders.
The lot size is 250 equity shares and in multiples thereafter. So retail investors can bid for a minimum of 250 equity shares, or 1 lot, for ₹15,000, and maximum of 3,250 shares, or 13 lots, for ₹195,000. As per SEBI norms, a retail investor can invest maximum up to ₹2 lakhs in an IPO.
The bank intends to use capital raised from fresh issues mainly for augmenting its Tier 1 capital base to meet its future capital requirements. A part of the fund will be also used to meet general corporate purposes.
Established in 1992, ESAF is a small finance bank mainly focusing on unbanked and under-banked customer segments, especially in rural and semiurban centres with 72% branches operating in these regions. The bank offers micro, retail, MSME, and agricultural loans, as well as loans to financial institutions. It also distributes third-party life and general insurance policies and government pension products.
As of June 30, 2023, the bank had a network of 700 banking outlets (including 59 business correspondent-operated banking outlets), 767 customer service centers (operated by its business correspondents), 22 business correspondents, 2,116 banking agents, 525 business facilitators, and 559 ATMs spread across 21 states and two union territories, serving 7.15 million customers.
In the financial year 2023, ESAF SFB reported robust growth of 452.39% in its profit after tax (PAT) at ₹302.33 as compared to ₹54.73 crore in the year ago period. The revenue increased by 46.29% to ₹3,141.57 crore in FY23 from ₹2,147.51 crore in FY22. For the June quarter of FY24, the bank posted ₹129.96 crore profit, while revenue stood at ₹991.78 crore.
ICICI Securities Limited, DAM Capital Advisors Limited, and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) are the book-running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE on November 16, 2023.
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