The company reduced its issue size by 63% to raise Rs 500 crore via its initial stake sale. According to the latest DRHP, the issue consists only of new shares with a nominal value of Rs 10 each.
Earlier, the Varanasi-based lender filed its draft document in July 2021 to raise Rs 1,350 which included a new issue worth Rs 750 crore and an offer to sell (OFS) of Rs 600 crore by developer Utkarsh coreinvest.
The company, in consultation with key officials in the matter, may consider a pre-IPO placement totaling Rs 100 crore. If such a pre-IPO placement is undertaken, the size of the new issue will be reduced.
However, the lender did not cite or mention the reason for the significant reduction in issue size. Moreover, the lender did not specify the reason why it did not launch its issuance in the past year.
Utkarsh SFB claims to record the second fastest growth in Assets Under Management (AUM) between FY 2018-19 and FY 2021-22. It has an AUM of over Rs 5,000 crore.
The proceeds of the issuance will be used to increase its Tier 1 capital base to meet future capital needs. The lender had launched its operations in the 2009-2010 financial year 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 bank outlets and 12,617 employees serving 3.14 million customers primarily 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, while total deposits stood at Rs 10,074.18 crore.
The company will allot at least 75% of the shares to qualified institutional buyers, while non-institutional investors will get 15% of the shares. Retail bidders will be entitled to the remaining 10% shares.
The lender’s gross non-performing assets for the period rose 6.1% from 3.75% last year. Net NPA increased 2.31% from 1.33%. It reported a 45% drop in profit from a year ago to Rs 61.46 crore.
and Capital Company are the lead arrangers of the offering, while KFin Technologies has been appointed as the issuance’s registrar.