Capital Small Finance received market regulator Sebi’s approval for its proposed initial public offering (IPO) today (January 16). The company submitted its draft prospectus on October 03 last year. The price band and the important dates of IPOs will be announced in due course.
The IPO consists of a fresh number of ₹450 crore and an offer for sale of up to 2,412,685 equity shares. For the IPO, Nuvama Wealth Management, DAM Capital Advisors, and Equirus Capital Private are the book-running lead managers.
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The bank started operations as India’s first small finance bank in 2016 and is among the leading SFBs in India in terms of cost of funds, retail deposits, and CASA deposits for fiscal 2023. It has the highest ratio of retail deposits at 97.90% , together with a CASA ratio of 41.88%, resulting in the lowest cost of finance of 5.12% among the SFBs as of fiscal 2023, according to the company’s RHP report.
Its loan portfolio consists of agricultural, MSME and business, mortgage loan, retail loans, and loans to large enterprises. As a small finance bank, it focuses mainly on agricultural, MSME, business, retail and mortgage loans, which make up the majority of its loans.
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The bank mainly focuses on middle-income customer segments, such as customers with an average annual income of ₹0.4 million to ₹5 million.
Its expenses increased from ₹13,450.77 million for fiscal 2021 to ₹19,906.71 million in FY23. Further, its advances in March 31, 2023, 2022, and 2021 and the three months ended June 30, 2023, were ₹55,072.67 million, ₹46,887.03 million, ₹37,629.87 million, and ₹55,193.27 million, respectively, which grew at a CAGR of 20.98% between Fiscal 2021 and Fiscal 2023.
As of June 30, 2023, the bank had 172 branches, of which 72 were rural branches, 59 were semi-urban branches, 30 were urban branches, and 11 were metro branches, the RHP report showed.
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The bank operates within a highly competitive landscape, battling with significant competition from other small finance banks, scheduled commercial banks, and NBFCs. Among its listed peers are AU Small Finance Bank, Equitas SFB, Ujjivan SFB, Jana SFB, ESAF SFB and Utkarsh SFB.
Disclaimer: The opinions and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 16 Jan 2024, 16:54 IST