The company has slashed its issue size by 63 per cent to raise Rs 500 crore via its initial stake sale. According to the latest DRHP, the issue consists of only fresh equity shares with a face value of Rs 10 each.
Earlier, the Varanasi-based lender had filed its draft paper in July 2021 to raise Rs 1,350 which included a fresh issue worth Rs 750 crore and offer-for-sale (OFS) of Rs 600 crore by promoter Utkarsh Coreinvest.
The company, in consultation with the lead managers to the issue may consider a pre-IPO placement aggregating to Rs 100 crore. If such pre-IPO placement is undertaken, the fresh issue size will be reduced.
However, the lender did not cite or mention the reason for cutting the issue size significantly. Also, the lender did not clarify the rationale for not launching its issue in the last one year.
Utkarsh SFB claims to record the second fastest asset under management (AUM) growth between financial year 2018-19 and financial year 2021-22. It has an AUM of more than Rs 5,000 crore.
The issue proceeds will be utilised to augment its tier 1 capital base to meet future capital requirements. The lender had kicked-off its operations in fiscal year 2009-10 as a non-banking financial company, mainly in Uttar Pradesh and Bihar.
As of March 31, 2022, the lender’s operations were spread across 22 states and union territories of the country, with 686 banking outlets and 12,617 employees serving 3.14 million customers majorly located in rural and semi urban areas.
Utkarsh Small Finance Bank’s gross loan portfolio stood at Rs 10,630.72 crore as of March 31, 2022, whereas total deposits were Rs 10,074.18 crore.
The company will allocate at least 75 per cent of the equity shares to the qualified institutional buyers, whereas non-institutional investors will get 15 per cent shares. Retails bidders will have their claim on the remaining 10 per cent of shares.
The lender’s gross non-performing assets for the period increased 6.1 per cent from 3.75 per cent last year. Net NPA rose 2.31 per cent as against 1.33 per cent. It reported a 45 per cent decline in profit from a year ago to Rs 61.46 crore.
and Capital Company are the book running lead managers for the offer, while KFin Technologies has been appointed as the registrar to the issue.
