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ESAF Small Finance Bank files DRHP, to raise Rs 998 crore via IPO

ESAF Financial Holdings and Kadambelil Paul Thomas are the promoters of the bank. Currently promoters collectively hold 69.40 percent stake in the bank.

July 27, 2021 / 07:34 AM IST

ESAF Small Finance Bank has filed the draft red herring prospectus (DRHP) with the capital market regulator Sebi to raise funds via an initial public offering.

The company is planning to raise Rs 997.78 crore through its public issue which consists of a fresh issue of Rs 800 crore and an offer for sale of Rs 197.78 crore by existing selling shareholders.

As part of the offer for sale, a promoter will be selling Rs 150 crore worth of shares, PNB Metlife India Insurance Company will be offloading shares worth Rs 21.33 crore, Bajaj Allianz Life Insurance Company Rs 17.46 crore, PI Ventures LLP Rs 8.73 crore, and John Chakola will be selling shares worth Rs 0.26 crore.

The offer includes a reservation of some shares for its employees.

The small finance bank may, in consultation with the book running lead managers, consider a pre-offer placement of of Rs 300 crore. If the pre-IPO placement is undertaken, then the said amount will be reduced from the fresh issue.

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ESAF will utilize the net proceeds from the fresh issue for augmenting its Tier – I capital base to meet future capital requirements.

ESAF Small Finance Bank is one of the leading small finance banks in India in terms of client base size, yield on advances, net interest margin, assets under management CAGR, total deposit CAGR, loan portfolio concentration in rural and semi-urban areas and ratio of micro loan advances to gross advances.

Along with promoters, it has a history of more than 25 years of primarily serving the unserved and underserved, with a focus on financial inclusion. As a small finance bank, it is required to have at least 75 percent of its adjusted net bank credit to the priority sectors.

Its asset products comprise micro loans, retail loans, MSME and corporate loans, and agricultural loans.

As at May 31, 2021, it had 550 branches, 421 customer service centres (which are operated by business correspondents), 12 business correspondents, 158 banking agents and 327 ATMs in 21 states and two union territories. It served over 4.68 million customers.

ESAF Financial Holdings and Kadambelil Paul Thomas are the promoters of the bank. Currently promoters collectively hold 69.40 percent stake in the bank.

ESAF Small Finance Bank can be compared with Suryoday Small Finance Bank, Ujjivan Small Finance Bank, Equitas Small Finance Bank, and Spandana Sphoorty Financial.

Axis Capital, Edelweiss Financial Services, ICICI Securities, and IIFL Securities are the book running lead managers to the issue.

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Moneycontrol News
first published: Jul 27, 2021 07:34 am

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