The initial public offering (IPO) of Varanasi-based Utkarsh Small Finance Bank will open for subscription today and close on July 14. This would be the second mainboard IPO to be launched this month after Kolkata-based jewellery retailer Senco Gold, which opened for bidding between July 4 and 6, 2023. The small finance bank plans to raise ₹500 crore from its public offering which is a completely fresh issue of equity shares. Ahead of the IPO, the company has raised ₹222.75 crore from 20 anchor investors at an upper price band of ₹25 per share.

Here’s all you need to know about Utkarsh Small Finance Bank IPO:

IPO dates

The issue opens for subscription on July 12 and closes on July 14, 2023. The anchor book, the part of qualified institutional buyers, opened on July 11. The shares will be allotted on July 19, while stocks are slated to list on the BSE and NSE on July 24.

Price band and lot size

The small finance bank has set the price band at ₹23-25 per share and lot size is 600 shares. This means, retail investors can apply for a minimum of 600 shares and in multiples of 600 shares thereafter. Hence, the minimum investment amount would be ₹15,000 for one lot and the maximum investment would be ₹1.95 lakh for 13 lots.

Issue Size

The company will issue 20 crore fresh equity shares, which would amount to ₹500 crore at the upper end of the price band of ₹25 apiece.

Objectives of Issue

The bank intends to use IPO proceeds to augments its Tier - 1 capital base to meet its future capital requirements. A part of the capital will also be used towards meeting the expenses in relation to the issue.

Reservation

The bank has reserved up to 75% of the issue for qualified institutional buyers (QIBs), up to 15% for non-institutional investors (NIIs), and remaining 10% for retail investors.

About Bank

Incorporated in 2016, Utkarsh Small Finance Bank (USFB) is a small finance bank with a pan-India presence, having operations across 26 states and union territories in India as of March 31, 2023. Headquartered in Varanasi, the bank has a strong presence in the rural and semi-urban geographies with a network of 830 branches, 287 ATMs, and 546 micro ATMs. It has Assets under management (AUM) of ₹5,000 crore and was the second fastest-growing SFB in India in the financial year 2019 and FY22. The bank offers loans up to ₹50 crores with a maximum tenure of up to 30 years. 

Financials

In the last three fiscals, USFB registered continued growth in its total income at ₹1,705.84 crore in FY21, ₹2,033.65 crore in FY22, and ₹2,804.29 crore in FY23. The net profit stood at ₹111.82 crore in FY21, ₹61.46 crore in FY22, and ₹404.50 crore in FY23.

On the asset quality front, the net NPAs for the last three years stood at 1.33%, 2.31%, and 0.39%, respectively.

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