Utkarsh Small Finance Bank looks to raise ₹1,350 crore from its IPO

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Utkarsh Small Finance Bank looks to raise ₹1,350 crore from its IPO
  • Utkarsh Small Finance Bank looks to raise ₹1,350 crore through fresh issue of shares worth ₹750 crore and an offer for sale to the tune of ₹600 crore by promoter Utkarsh Coreinvest.
  • The small finance bank’s deposit base is spread across 18 states and union territories in India, with northern (64.46%), eastern (15.47%), southern (1.33%) and western regions (18.73%).
  • The Varanasi-headquartered small finance bank intends to utilise the net proceeds from IPO towards expansion of its tier-1 capital base.
Another one in the already long list of upcoming IPOs, this year, is Utkarsh Small Finance Bank, which is looking to raise ₹1,350 crore through initial public offering (IPO).

The IPO will consist of a fresh issue of shares worth ₹750 crore and an offer for sale (OFS) to the tune of ₹600 crore by promoter Utkarsh CoreInvest.

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The small finance bank plans to utilise the proceeds from the IPO towards augmentation of its tier-1 capital base to meet future capital requirements which are expected to arise out of growth in the bank’s assets, primarily bank’s loans/advances and investment portfolio.

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Small finance banks come under a specific segment of banking whose objective is to provide basic banking activities to unserved regions and underserved sectors like small business units, small and marginal farmers, micro and small industries and so on.

The company has witnessed stable growth over the past three years in gross loan portfolio and total deposits. The lender’s banking outlets have increased from 164 banking outlets as of March 31, 2018 to 528 banking outlets spread across 18 states and union territories in India, as of September 30, 2020.

“We intend to continue to diversify our retail asset portfolio, grow our retail deposit mix across geographies and customer segments, increase our share of fee income and increase the use of technology,” the small finance bank said in its draft red herring prospectus (DRHP).

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Other listed 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.

BankStock returns between Jan 2021-June 2021
Equitas Small Finance Bank56%
AU Small Finance Bank21%
CreditAccess Grameen-1%
Spandana Sphoorty Financial-11%
Bandhan Bank-18%
Ujjivan Small Finance Bank-21%

SEE ALSO: Ola app raises $500 million from Temasek and Warburg, ahead of IPO (businessinsider.in)

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