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Utkarsh Small Finance Bank plans to raise Rs 500 crore through an initial public offering (IPO). The subscription for the IPO will be open from July 12 to July 14, 2023. The price band is fixed at Rs 23-25 per share.
The IPO consist of only fresh issue of shares worth up to Rs 500 crore. The face value is set at Rs 10 apiece.
Company Summary
Utkarsh Small Finance Bank Limited is one of the leading small finance banks (SFBs) and it has recorded the third fastest gross loan portfolio growth between fiscal 2019 and fiscal 2023 among SFBs with gross loan portfolio of more than Rs 60 billion. As of March 31, 2023, Uttar Pradesh and Bihar constituted 30.88% and 25.98% of their total gross loan portfolio, respectively.
The company is headquartered located in Varanasi, Uttar Pradesh, and it has over the years expanded its SFB operations strategically in states by leveraging their prior microfinance experience. The operations are primarily focused in rural and semi-urban areas and it had 3.59 million customers (both deposit and credit) as of March 31, 2023.
The lender’s asset products include (i) micro-banking loans that include joint liability group loans and individual loans; (ii) retail loans that includes unsecured loans such as business loans and personal loans, secured loans such as loans against property; (iii) wholesale lending that includes short term and long-term loan facilities to SMEs, mid and large corporates and institutional clients; (iv) housing loans with a focus on affordable housing; (v) commercial vehicle / construction equipment loans; and (vi) gold loans.
The company’s operations are spread across India and are present in 26 states and union territories with 830 banking outlets and 15,424 employees, as of March 31, 2023. The company has tied-up with 13 business correspondents to source customers and 321 direct selling agents to grow our asset portfolio.
Company Strengths
- Sound understanding of microfinance segment and presence in rural and semi-urban areas.
- Sustained growth in the bank’s customer base leading to diversification of its deposit franchise and expansion of retail deposit base.
- Extensive and diversified distribution network with significant cross-selling opportunities.
- Focus on robust and comprehensive credit assessment and risk management framework.
- Consistent growth on gross loan portfolio with cost efficient operational performance.
- Strong management team comprising of qualified and experienced professionals.
Company Financials
Period Ended | FY23 | FY22 | FY21 |
Total Assets (Rs in crore) | 19,117.54 | 15,063.77 | 12,137.91 |
Total Revenue (Rs in crore) | 2,804.29 | 2,033.65 | 1,705.84 |
Profit After Tax (Rs in crore) | 404.5 | 61.46 | 111.82 |
Net Interest Income (Rs in crore) | 1529.03 | 1,060.85 | 839.25 |
Net Interest Margin (%) | 9.57% | 8.75% | 8.20% |
Credit to Deposit Ratio (%) | 95.32% | 101.53% | 109.45% |
Return on Average Assets (%) | 2.42% | 0.48% | 1.05% |
Return on Average Equity (%) | 22.84% | 4.14% | 9.99% |
CASA Ratio (%) | 20.89% | 22.37% | 17.68% |
Provision Coverage Ratio (%) | 95.78% | 78.14% | 80.42% |
Gross NPA (%) | 3.23% | 6.10% | 3.75% |
Net NPA (%) | 0.39% | 2.31% | 1.33% |
Capital Adequacy Ratio (%) | 20.64% | 21.59% | 21.88% |
Purpose of the IPO
The net proceeds from issue of fresh issue of shares are proposed to be utilised towards augmentation of the bank’s tier-I capital base to meet its future capital requirements, which are expected to arise out of its growth in loans and advances as well as investment portfolio. The fresh capital will also ensure compliance with regulatory requirements on capital adequacy prescribed by the RBI from time to time.
Company Promoters
Utkarsh CoreInvest Limited is the promoter of the company.
IPO Details
IPO Subscription Date | July 12 to July 14, 2023 |
Face Value | Rs 10 per share |
Price | Rs 23 to Rs 25 per share |
Lot Size | 600 shares |
Total Issue Size | 20 crore shares aggregating up to Rs 500 crore |
Fresh Issue | 20 crore shares aggregating up to Rs 500 crore |
Issue Type | Book Built Issue IPO |
Listing At | BSE, NSE |
IPO Lot Size
Application | Lots | Shares | Amount |
Retail (Minimum) | 1 | 600 | Rs 15,000 |
Retail (Maximum) | 13 | 7,800 | Rs 1,95,000 |
Small HNI (Minimum) | 14 | 8,400 | Rs 2,10,000 |
Small HNI (Maximum) | 66 | 39,600 | Rs 9,90,000 |
Large HNI (Minimum) | 67 | 40,200 | Rs 10,05,000 |
Allotment Details
Event | Tentative Date |
Allotment of Shares | July 19, 2023 |
Initiation of Refunds | July 20, 2023 |
Credit of Shares to Demat Account | July 21, 2023 |
Listing Date | July 24, 2023 |
To check allotment, click here