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SBFC Finance, a non-banking financial company, plans to raise capital worth Rs 1025 crore by going public. The subscription for the IPO will be open from August 3 to August 7, 2023. The price band is fixed at Rs 54—57 per share.
The IPO comprises of fresh issue of shares worth Rs 600 crore and offer for sale of shares worth Rs 425 crore.
Employees of the company will get a discount of Rs 2 to the final issue price. The face value of each share is Rs 10 and the size of one lot is 260 shares.
Company Summary
SBFC Finance Limited is a systemically important, non-deposit taking non-banking finance company (“NBFC-ND-SI”) offering secured MSME loans and loans against Gold, with a majority of our borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals.
Among MSME-focused NBFCs in India, SBFC has one of the highest assets under management (“AUM”) with a CAGR growth of 44% in the period between fiscal 2019 and fiscal 2023. The NBFC has also witnessed healthy disbursement growth at a CAGR of 40% between FY21 and FY23.
The company’s AUM is diversified across India, with 30.84%, being Rs 15,242.41 million, in the North (in the states of Chandigarh, Delhi, Haryana, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand), 38.53%, being Rs 19,047.97 million, in the South (in the states of Karnataka, Andhra Pradesh, Telangana, Tamil Nadu and Puducherry), and 30.63%, being Rs 15,137.85 million, in the West and East (in the states of Gujarat, Madhya Pradesh, Maharashtra, West Bengal, Assam and Bihar), as of March 31, 2023.
SBFC’s disbursements across zones are also well-distributed, and we have reduced our concentration risk across industries and sectors, as demonstrated by the fact that no single industry, including the manufacturing sector, contributes more than 10% of our loan portfolio as of March 31, 2023.
As of March 31, 2023, the company has an expansive footprint in 120 cities, spanning 16 Indian states and two union territories, with 152 branches. SBFC serves customers in tier II and tier III cities, thereby, fostering entrepreneurship in these regions, focusing on customers who have a strong credit history but lack formal proof of income documents.
Company Strengths
- Diversified pan-India presence with an extensive network to cater to their target customer segment.
- Comprehensive credit assessment, underwriting and risk management framework.
- Extensive on-ground collections infrastructure leading to maintenance of robust asset quality.
- High level of customer satisfaction and increased loyalty achieved through adoption of direct sourcing model.
- Healthy liability franchise with low cost of funds.
- Consistent financial performance backed by profitable growth.
- Experienced and professional management team with good corporate governance backed by marquee investors.
Company Financials
Period Ended | FY23 | FY22 | FY21 |
Total Assets (Rs in crore) | 5,746.44 | 4,515.03 | 4,231.19 |
Total Liabilities (Rs in crore) | 4019.17 | 3227.87 | 3026.08 |
Total Revenue (Rs in crore) | 740.36 | 530.7 | 511.53 |
Profit After Tax (Rs in crore) | 149.74 | 64.52 | 85.01 |
Interest Income (Rs in crore) | 654.15 | 473.15 | 463.17 |
Net Interest Margin | 9.32% | 9.39% | 11.73% |
Return on Equity | 9.93% | 5.18% | 7.67% |
Net NPA ratio | 1.41% | 1.63% | 1.95% |
Cost to Income ratio | 49.82% | 57.19% | 46.34% |
Provision Coverage Ratio | 42.04% | 40.44% | 38.25% |
Purpose of the IPO
- The proceeds from offer for sale will go to each promoter selling shareholder after deducting its respective proportion of the Offer related expenses and relevant taxes.
- The net proceeds from fresh issue of shares totalling about Rs 600 crore will be utilized for augmenting the capital base of the company. The company also intends to utilize the net proceeds to meet its future capital requirements, which are expected to increase due to growth of their business and assets.
- The company also expects to receive the benefits of listing of equity shares on the stock exchanges and also enhance the company’s brand name.
Company Promoters
SBFC Holdings Pte. Ltd., Clermont Financial Pte. Ltd., Arpwood Partners Investment Advisors LLP, Arpwood Capital Private Limited, and Eight45 Services LLP are promoters of the company.
IPO Details
IPO Subscription Date | August 3 to August 7, 2023 |
Face Value | Rs 10 per share |
Price | Rs 54 to Rs 57 per share |
Lot Size | 260 Shares |
Total Issue Size | Rs 1,025 crore |
Fresh Issue | Rs 600 crore |
Offer for Sale | Rs 425 crore |
Issue Type | Book Built Issue IPO |
Listing At | BSE, NSE |
IPO Lot Size
Application | Lots | Shares | Amount |
Retail (Minimum) | 1 | 260 | Rs 14,820 |
Retail (Maximum) | 13 | 3380 | Rs 192,660 |
Small HNI (Minimum) | 14 | 3,640 | Rs 207,480 |
Small HNI (Maximum) | 67 | 17,420 | Rs 992,940 |
Large HNI (Minimum) | 68 | 17,680 | Rs 1,007,760 |
Allotment Details
Event | Date |
Allotment of Shares | August 10, 2023 |
Initiation of Refunds | August 11, 2023 |
Credit of Shares to Demat Account | August 14, 2023 |
Listing Date | August 16, 2023 |
To check allotment status, click here