Varanasi-based Utkarsh Small Finance Bank has resubmitted preliminary papers to market regulator Sebi, reducing the size of its initial public offering (IPO) to €500 crores. The bank had previously sought an increase €1,350 crore through an initial stock sale.
According to a PTI report, the company resubmitted the paper because Sebi’s year-long approval to the small financial bank (SFB) to launch the IPO in June expired.
Securities and Exchange Board of India regulations state that a company has one year to enter the primary market after receiving approval from the market regulator. If a company fails to do so during this time, they must resubmit the prospectus to Sebi and apply for re-approval.
CRCs €500 crore IPO
According to a new draft of the SFB’s Red Herring prospectus (DRHP) submitted yesterday €500 crore IPO is a completely new issue of shares and all proceeds go to the bank.
The lender may consider issuing securities in aggregate up to €100 crore in a pre-IPO placement round. If such a placement is made, the volume of new issues will be reduced.
Proceeds from the reissuance will be used to increase the lender’s Tier 1 capital base to meet future capital requirements.
In March of last year, the SFB submitted paper drafts to Sebi for the survey €1,350 crore through the IPO. It aimed to issue new shares in the amount of €750 crore and a sale offer of up to €600 crores.
The lender had given Sebis the green light to go public in June last year, but didn’t launch the initial share sale.
ICICI Securities and Kotak Mahindra Capital Company are the lead bookers of the offering.
Small financial banks belong to a specific segment of banking that aims to provide basic banking services to unserved regions and underserved sectors such as small business units, small and marginal farmers, micro and small scale industries, etc.
Other public companies in the small finance segment include Equitas Small Finance Bank, Ujjivan Small Finance Bank, CreditAccess Grameen, Spandana Sphoorty Financial, Bandhan Bank and AU Small Finance Bank.
Utkarsh SFB has a net profit of €48.4 Cr in March qtr
Meanwhile, Utkarsh Small Finance Bank has made a net profit of €48.4 crore in the March quarter after a €24.6 crore loss in the previous quarter.
The bank’s loans rose 24.5% year-on-year €10228 crore at the end of March. Deposits increased by 34.2% €10074 crores.
The lender’s gross non-performing assets ratio was 6.10% at the end of the period. The net NPA was 2.31%. The pension coverage ratio was 63.6%.
As of March 31 of this year, its operations are spread across 22 states and union territories with 686 banking offices and 12,617 employees serving 31.4 lakh customers located mainly in rural and semi-urban areas, mainly in Bihar, Uttar Pradesh and Jharkhand .
With agency inputs
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