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Fincare Small Finance Bank receives Sebi approval for ₹ 1,330 Cr IPO

Mumbai: Fincare Small Finance Bank (Fincare SFB) Ltd announced Monday that it has received approval from the Securities and Exchange Board of India (Sebi) to launch an initial public offering (IPO) to raise Rs.1,330 billion.

Fincare SFB filed the draft Red Hering prospectus with the market regulator in May to increase the amount. The IPO includes a new issue of 330 crore and an offer for sale of 1,000 crore by the promoter of the bank Fincare Business Services Ltd. Fincare Business holds 78.57% of the shares in the bank.

In May, Motilal Oswal Private Equity (PE) announced that it had acquired a minority stake in Fincare Small Finance Bank through a secondary acquisition valued at approximately Rs.185 billion ($ 25 million). The investment was made through the India Business Excellence Fund-III, a fund managed and advised by Motilal PE.

The Bengaluru-based Fincare Small Finance Bank is a “digital first” SFB with a focus on customers with and without bank details, especially in rural and semi-urban areas. She was one of 10 applicants to receive approval from the Reserve Bank of India (RBI) to convert from a microfinance institution to an SFB according to the guidelines issued by the central bank in 2015 for this new class of banking.

It started banking operations in July 2017.

The proceeds from the re-issue of shares will be used to increase the bank’s Tier 1 capital base to meet its future capital needs.

In December 2020, the gross NPA for prepayments was 3.46%, while the net NPA for prepayments was 1.88%.

ICICI Securities, Axis Capital, IIFL Securities, SBI Capital Markets and Ambit Pvt. Ltd are the commercial banks for the issue.

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