Kerala based, ESAF Small Finance Bank has received approval from the capital markets regulator Sebi to go ahead with its initial public offering (IPO). The company had filed its draft papers in July-end this year.
The Rs. 997.78 crore public issue comprises fresh issue of equity shares worth Rs 800 crore and an offer for sale of Rs 197.78 crore by existing selling shareholders, the draft red herring prospectus (DRHP) filed with Sebi showed.
Under the offer for sale, promoter will be selling shares worth Rs 150 crore, PNB MetLife would be offloading shares to the tune of Rs 21.33 crore, Bajaj Allianz Life will offer shares of Rs 17.46 crore, PI Ventures will sell Rs 8.73 crore worth shares and John Chakola will offer shares worth Rs 26 lakh.
The net proceeds from the fresh issue will be used to augment the bank's Tier 1 capital (primarily loans, advances and investment portfolio) to meet future capital requirements.
The company may consider a Pre-IPO placement of up to ₹ 300 crs subject to counsel from the lead managers.
As per the CRISIL report, ESAF, is one of the leading small finance banks in terms of client based size, yield on advances, Net Interest Margin, asset under management CAGR, total deposit CAGR, loan portfolio concentration in rural and semi-urban areas and ratio of micro loan advances to gross advances. It currently operates across 21 states and two union territories with 550 Branches, 421 customer service centres (which are operated by our business correspondents), 12 business correspondents, 158 banking agents and 327 ATMs and serves over 4.68 million customers.
The bank that follows a social business strategy seeking an impact across people, planet and prosperity, has asset products comprising of micro loans, retail loans, MSME and corporate loans and agricultural loans.
As of March 2021, its gross advances stood at Rs 8,415 crs compared with Rs 6,606.51 crs a year ago and total deposits were at Rs 8,999.43 crs against Rs 7028.38 crs.
Additionally, the DRHP states that the bank will continue to focus on its rural and semi urban franchisees and increase deposits across NRIs and CASA. As on date, it stands to have the highest share of retail deposits as a percentage to the total deposits when compared to the other small finance banks.
Investment Bankers appointed to the issue are Axis Capital Ltd, Edelweiss Financial Services Ltd, ICICI Securities Ltd and IIFL Securities Ltd.