The Securities Exchange Board of India has received a proposed red herring prospectus from Utkarsh Small Finance Bank in order to raise Rs1,350 crore through an initial public offering (IPO).
In consultation with book-running lead managers, the lender said it may consider a pre-IPO placement of up to Rs250 crore.
The Initial Public Offering, or IPO, is a way for a company to raise capital from investors for potential ventures while still being listed on the stock exchange.
As of September, it operated in 18 states and union territories, with 528 banking locations and 8,729 employees.
According to a Crisil survey, Utkarsh Small Finance Bank is one of India's most profitable SFBs and one of the leading SFBs in terms of return on assets.
The new generation microlender, based in Varanasi, provides small-ticket loans ranging from Rs 10,000 to Rs 25 lakh. Agricultural, micro, small, and medium enterprises (MSMEs), and housing account for roughly 90% of its credit.
The proceeds will be used to supplement the tier-I capital base in order to fulfil potential capital needs. Its CRAR was 24.87 percent in September.
The lender's total income for fiscal 2020 was Rs1,406.24 crore, up from Rs958.25 crore the previous year. In FY19, the net profit was Rs186.74 crore, compared to Rs110.87 crore in FY19. The period's provisions totalled Rs163.55 crore.
The issue's book-running managers are ICICI Securities, IIFL Securities, and Kotak Investment Banking. Its total deposits were Rs5,969.30 crore in September, while advances were Rs6,606.58 crore. The provision coverage ratio was 101.99 percent, with gross NPAs at 0.64 percent.