Utkarsh Small Finance Bank files for IPO, plans to raise ₹13,500 million
Utkarsh Small Finance Bank is headed towards its debut on the stock market as it has filed its draft red herring prospectus (DRHP) with the Securities Exchange Board of India (Sebi). The lender, which claims to be India's most profitable small finance bank (SFB), aims to raise ₹7,500 million in fresh issue and ₹6,000 million from the offer for the sale through its promoter.
The Utkarsh CoreInvest Limited is the promoter and ICICI Securities, IIFL Securities, Kotak Investment Banking are the book-running managers of the initial public offering (IPO) of the lender.
In the DRHP the Varanasi-based bank cited a Crisil report that said the bank is among the leading small finance banks with respect to return on assets and had the highest return on equity among SFBs in the country in Fiscal 2020.
Reports about the bank releasing its IPO to raise ₹500-600 crore were in news since 2019 as the offer was expected to come by December 2020.
The leading small finance bank of the country has also said that it may consider a pre-IPO placement. The Fresh issue size will be reduced in case the pre-IPO placement is completed. "Our Bank proposes to utilize the net proceeds from the fresh issue towards augmenting its Tier –1 capital base to meet its future capital requirements. Further, the proceeds from the fresh issue will also be used towards meeting the expenses in relation to the offer. Additionally, our Bank expects to receive the benefits of listing the equity shares on the stock exchanges," it stated as the purpose of the offer.
The operations of the bank are spread across the country and it has its presence in 18 states and Union territories with 528 banking outlets and 8,279 employees, as of September last year. The small finance bank's operations are majorly focussed on rural and semi-urban locations with a customer base of 2.74 million.
The financial statements of the bank stated that for the half-year ended in September 2020, the net profit of the lender stood at over ₹778 million.