Capital Small Finance Bank to hit IPO street, files draft papers with Sebi

Established in 2000 by Samra, the Jalandhar-headquartered bank changed its name from Capital Local Area Bank to Capital SFB

Private equity and venture capital-backed Capital Small Finance Bank Ltd has filed the draft papers with the Securities and Exchange Board of India (Sebi) to raise funds through a public issue.

The IPO consists of a fresh issue of Rs 450 crore and an offer-for-sale of up to 24.12 lakh shares by its existing shareholders and promoters.

The OFS comprises up to 8.37 lakh shares by Oman India Joint Investment Fund II, up to 3.37 lakh shares by PI Ventures LLP, up to 6.05 lakh shares by Amicus Capital Private Equity I LLP, up to 70,178 shares by Amicus Capital Partners India Fund-I and up to 5.64 lakh shares by other shareholders.

Nuvama Wealth Management, DAM Capital Advisors and Equirus Capital are the lead managers to the issue.

The funds raised from the issue will bolster the lender's Tier-I capital to address future capital needs driven by asset growth, especially in loans and investments, and to ensure compliance with the RBI's capital adequacy regulations, the lender said.

The bank is supported by private investors, including Amicus Capital, Oman India Joint Investment Fund (OIJIF), and Pi Ventures. It recently received an equity investment from Max Life Insurance Company Ltd, valuing the bank at over Rs 1,600 crore for a minority equity stake.

Established in 2000 by Samra, the Jalandhar-headquartered bank changed its name from Capital Local Area Bank to Capital SFB and commenced banking operations on April 24, 2016, becoming India's first small finance bank (SFB).

Starting with 47 branches, it has now expanded to more than 172 branches across Delhi, Haryana, Rajasthan, Himachal Pradesh, and the Union Territory of Chandigarh. The bank offers a range of loan products, including those for small and medium enterprises, agriculture, housing, and other needs, primarily serving small borrowers.

For the June 2023 quarter, the bank's total business grew by 15.6 percent to Rs 12,583.68 crore. For the quarter, the bank had registered a profit after tax at Rs30.10 crore as compared to Rs 18.28 crore a year ago. Total income stood at Rs 202.29 crore versus Rs162.91 crore.

Its total advances as of June 2023 was at Rs 5,519 crore, while its deposits stood at Rs 7,064.35 crore, with current and savings deposit share at 40.04 percent. Gross and net non-performing assets improved to 2.81 percent and 1.37 percent from 2.93 percent and 1.7 percent.