Fincare Small Finance Bank (Fincare SFB) filed a drafted red herring prospectus with the Securities Exchange Board of India on Sunday to collect Rs 1,330 crore via an IPO (IPO). Fincare is a "digital-first" Small Finance Bank (SFB) in rural and semi-urban areas that focuses on underbanked and unbanked customers. Through its India Business Excellence Fund III, Motilal Oswal Private Equity acquired a minority stake in Fincare Small Finance Bank for around Rs 185 crore earlier this month, allowing True North Fund, one of the primary investors, to exit partially.
Important Things to Know
1) The bank's promoter company Fincare Business Services Ltd, which owns a 78.57 percent stake in the bank, will issue a fresh issue of Rs 330 crore and a bid for the sale of Rs 1,000 crore as part of the IPO.
2) Fincare SFB is a microfinance institution-turned-non-banking financial company headquartered in Bengaluru.
3) Fincare was one of ten applicants out of a total of 72 who received Reserve Bank of India (RBI) approval for conversion into an SFB under the central bank's 2015 guidelines for this new class of banks.
4) Fincare Business Services owned 78.57 percent of Fincare SFB, followed by Amethyst Inclusion 3.92 percent, Wagner 2.48 percent, True North Fund V LLP 2.34 percent, Indium IV (Mauritius) Holdings 2.27 percent, and Omega TC Holdings 1.18 percent at the time of the DRHP filing.
5) In comparison to its peers, the bank had the highest growth rate in advances from the fiscal year 2018 to the fiscal year 2020, according to CRISIL. From March 2018 to December 2020, its gross loan portfolio (GLP) increased from Rs 2,154.37 crore to Rs 5,547.58 crore.
6) The issue's global coordinators and book running lead managers are ICICI Securities, Axis Capital, IIFL Securities, and SBI Capital Markets, while the offer's book running lead manager is Ambit.