Jaipur based non-banking finance company (NBFC) SK Finance has kickstarted preliminary discussions to float an initial public offer (IPO) next year and raise around $250 mn to $300 mn (Rs 2,092 crore to Rs 2,511 crore), multiple industry sources in the know told Moneycontrol.
The firm, formerly called Ess Kay Fincorp, is backed by the likes of TPG Growth and Norwest Venture Partners and recently inducted Motilal Oswal Alternates on board.
"SK Finance is looking to unlock value via a listing which would provide a partial exit to the investors and help to mop up growth capital," said one of the persons above.
A second person familiar with the proposed IPO told Moneycontrol that it would be a combination of a primary and secondary issue of shares.
"Pitches with a clutch of global and domestic investment banks will be held this week to select the syndicate of advisors. Some pitches have happened earlier. A pre-IPO round may also be on the cards, but no final call has been taken," a third person told Moneycontrol.
All three persons above spoke to Moneycontrol on the condition of anonymity.
When contacted, TPG declined to comment.
Inquiries made to SK Finance and Norwest Venture Partners went unanswered. This article will be revised upon receiving responses from these entities.
SK Finance: The next NBFC IPO aspirant
SK Finance Limited was incorporated in 1994 by Rajendra Kumar Setia and his family members. Its portfolio includes funding for used and new commercial vehicles, tractors, two-wheeler and business loans.
The firm's website says it has 9.3 plus lakh customers and 9,500 plus employees with a presence across 12 states and 1 union territory through over 490+ branches.
According to a September 15 note by Crisil Ratings on SK Finance, the latter has a legacy of over 28 years in the used vehicle finance segment and has, over a period of time, evolved from being a direct selling agent to a full-fledged NBFC.
The company had an AUM of Rs 7,937 crore as on June 30, 2023. It reported a profit after tax (PAT) of Rs 61 crore on a total income of Rs 403 crore for the quarter ending June 30, 2023, as against a PAT of Rs 223 crore on a total income of Rs 1,314 crore in fiscal 2023, the Crisil Ratings note added.
IPO action in the NBFC space and more
The last listing in the NBFC space came from Federal Bank's subsidiary FedBank Financial Services which is backed by private equity firm True North. The firm recently raised Rs 1,092 crores and had a muted debut on November 30.
Also Read: IPO-bound NBFC Avanse, backed by Warburg Pincus, seeks fresh Rs 1,000-cr fund raise
Earlier in the year, SBFC Finance made a healthy Dalal street debut on August 16 listing at a premium of 44 per cent. The firm's share price has moved from Rs 82/share on listing day to Rs 88.20 /share at the end of day's trade on December 5.
Other public issues are also lined up in the financial services space.
On October 17, Moneycontrol reported that Hero FinCorp, the financial services arm of India's largest two-wheeler maker Hero Moto Corp, had shortlisted a syndicate of eight investment banks to launch a mega initial public offer in 2024.
Also Read: Hero MotoCorp arm Hero FinCorp picks 8 i-banks for mega IPO of around Rs 4,000 crore
On November 30, we reported that 10 months after raising Rs 800 crore from private equity firm Kedaara Capital, IPO-bound Avanse Financial Services is on the prowl to raise funds again. Warburg Pincus holds a majority stake in the education-focused NBFC.
Also Read: Fedbank Financial Services records muted show on listing day, closes tad above issue price of Rs 140
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