Tuesday, October 31, 2023

ESAF Small Finance Bank Limited’s Initial Public Offering to open on Friday, November 3, 2023, sets price band at ₹57 to ₹60 per Equity Share


(L-R) Mr. Gireesh C.P., CFO and Mr. Kadambelil Paul Thomas, MD & CEO during IPO announcement at Mumbai

Mumbai, October 31, 2023: ESAF Small Finance Bank Limited, a small finance bank with a focus on unbanked and under-banked customer segments, especially in rural and semi-urban centers, has fixed the price band at ₹57 to ₹60 per Equity Share for its maiden initial public offer. The Initial Public Offering (“IPO” or “Offer”) of the Company will open on Friday, November 3, 2023, for subscription and close on Tuesday, November 7, 2023. Investors can bid for a minimum of 250 Equity Shares and in multiples of 250 Equity Shares thereafter.

The Public Issue of face value of ₹10 per Equity Share comprises of fresh issuance of Equity Shares worth Rs 390.70 crore and an Offer for Sale (OFS) of up to Rs 72.30 crore aggregating to Rs 463 crore.

The Bank proposes to utilise the proceeds of the fresh issue to augment its Tier 1 capital base.

The Lender's primary products are advances and deposits (current accounts, savings accounts, term deposits, and recurring deposits). Its advances comprise of Micro Loans (comprising Microfinance Loans and Other Micro Loans), retail loans (such as gold loans, mortgages, personal loans, and vehicle loans), MSME loans, loans to financial institutions, and agricultural loans. 

It has a network of 700 banking outlets (including 59 business correspondent-operated banking outlets), 767 customer service centers (operated by its business correspondents), 22 business correspondents, 2,116 banking agents, 525 business facilitators, and 559 ATMs spread across 21 states and two union territories, serving 7.15 million customers as at June 30, 2023.

As of June 30, 2023, 62.97% of their gross advances were directed toward customers in rural and semi-urban areas, and 71.71% of their banking outlets were located in these regions. The bank has 72% branches present in rural and semi-urban regions as of June 30, 2023.

As of June 30, 2023, ESAF SFB was the fifth largest SFB in India in terms of AUM. Between March 31, 2021, and 2023, the bank had the fourth-highest deposit growth among its comparable peers and the highest AUM growth. Its assets under management (AUM) grew from ₹8,425.93 crore to ₹16,331.27 crore, with a compound annual growth rate (CAGR) of 39%. 

It reported the second highest year-on-year AUM growth for three months ended Fiscal 2024 among compared SFBs. Deposits also increased from ₹8,999.43 crores to ₹14,665.63 crores during the same period, registering a CAGR of 28%, the fourth highest growth among their peers. As of June 30, 2023, Retail Deposits were ₹13,977.27 crore, which accounted for 89.28% of the total deposits.

ICICI Securities Limited, DAM Capital Advisors Limited, and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) are the book-running lead managers.

Notes for Reference: 

Issue Size of the IPO based on the upper and lower end of the price band

Fresh (Rs 390.70 crore) OFS (Rs 72.30 crore) Total (Rs 463 crore) 

Lower Band (@Rs 57) Rs 390.70 crore Rs 72.30 crore Rs 463 crore

Upper Band (@Rs 60) Rs 390.70 crore Rs 72.30 crore Rs 463 crore

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