LKP Research IPO report on Utkarsh Small Finance Bank
UTKARSH SMALL FINANCE BANK recorded the second fastest AUM growth between FY2019 and FY2022 among SFBs with AUM of more than ₹50 bn. The promoter, Utkarsh CoreInvest commenced operations as an NBFC in FY2010 and was focused on providing microfinance to unserved and underserved segments and in particular in the states of Uttar Pradesh and Bihar. The company’s headquarters is located in Varanasi, Uttar Pradesh and has over the years expanded operations strategically in States where they have been able to leverage the prior microfinance experience of Utkarsh CoreInvest. On October 7, 2015, Utkarsh CoreInvest received the RBI In-Principle Approval to establish an SFB, following which it incorporated Utkarsh Small Finance Bank as a wholly-owned subsidiary on April 30, 2016.
Valuation and Outlook
At higher price band ( ₹25), the stock is valued at 1.8(x) P/BVPS with current book value per share of ₹18. Factoring the superlative return ratios, FY23 ROAA/ROAE of 2.42%/22.84%. We believe that Utkarsh Small Finance Bank is worth subscribing. We recommend to SUBSCRIBE.
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