Utkarsh Small Finance Bank

Utkarsh Small Finance Bank will begin accepting subscriptions for its IPO this week. The anchor investor bidding is set for today.

With a presence across India, Utkarsh Small Finance Bank is one of the leading microfinance institutions. The bank is promoted by Utkarsh Coreinvest Limited, which started operating as an NBFC in the financial year 2010, focusing primarily on providing microloans in underserved and unserved areas of Uttar Pradesh and Bihar states.

The lender had filed a draft red herring prospectus (DRHP) in July 2021 to raise ₹1,350 crore initially, with a fresh issue of ₹750 crore and an offer for sale (OFS) of ₹600 crore by its promoter Utkarsh Coreinvest Limited.

However, it modified the issue size to reduce it by 63 percent through an IPO with SEBI in August 2022, aiming to raise ₹500 crore. The initial goal of the IPO was to raise 1,350 crore.

Here are some key things to know about the Utkarsh Small Finance Bank IPO:

Anchor Investors: The bidding for anchor investors will commence on Tuesday, July 11.

pricing Band: The anticipated initial public offering’s (IPO) pricing range has been set at between 23 and 25 rupees per equity share.

Issue Details and Size: As per the red herring prospectus (RHP), the Utkarsh Small Finance Bank IPO comprises fresh equity shares worth up to ₹500 crore, with no OFS component for sale. Each equity share will have a face value of ₹10.

Lot Size: The minimum bid lot size is 600 equity shares and in multiples of 600 equity shares thereafter.

More about Utkarsh Small Finance Bank

Allocation and Listing: The basis of share allotment will be finalized on Wednesday, July 19, and the company will initiate refunds on Thursday, July 20. The shares are expected to be credited to the demat accounts of allottees on Friday, July 21. Utkarsh Small Finance Bank’s shares are likely to be listed on BSE and NSE on Monday, July 24.

Lead Managers and Registrar: ICICI Securities Limited and Kotak Mahindra Capital Company Limited are the book-running lead managers for the public offering, while KFin Technologies Limited is the registrar of the issue.

Promoter Shareholding: Utkarsh Coreinvest Limited, formerly known as Utkarsh Micro Finance Limited, is the sole promoter of the bank. As of the date of the red herring prospectus, the promoter and its nominated persons collectively held 759,272,222 equity shares, representing 84.75% of the pre-issue issued share capital.

Utkarsh Small Finance Bank

Objective of the IPO: The proceeds from the IPO will be utilized to strengthen the bank’s Tier I capital base and meet future capital requirements. As of March 2023, its Tier I capital base stood at ₹1,844.82 crore, or 18.25%.

IPO Reservation: The company has reserved a minimum of 75% of the shares for qualified institutional buyers (QIBs), not more than 15% for non-institutional investors (NIIs), and not more than 10% for retail investors.

According to the CRISIL report mentioned in its DRHP, Utkarsh CoreInvest Limited, which started its activities as an NBFC in Fiscal 2010, focuses on providing microfinance to the unserved and underserved groups, primarily in the states of Uttar Pradesh and Bihar. Utkarsh’s AUM rise between FY2019 and FY22 was the second-fastest.

As of March 31, 2022, 686 banking locations, mostly in rural and semi-urban areas, particularly in the states of Bihar, Uttar Pradesh, and Jharkhand, were used by small financing banks to serve 22 states.

Its total deposits nearly doubled from Rs 5,235.21 crore as of March 31, 2020 to Rs 10,074.18 crore as of March 31, 2022, while its gross loan portfolio increased from Rs 6,660.95 crore as of March 31, 2020 to Rs 10,630.72 crore.

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