MC Exclusive: Utkarsh Small Finance Bank is evaluating its IPO due to market conditions, says CEO

The lender’s initial plan was to raise Rs 1350 crore from the IPO which was later trimmed to Rs 500 crore.

Varanasi-based Utkarsh Small Finance Bank is evaluating its initial public offering (IPO) plan due to market conditions, said Govind Singh, managing director and chief executive officer (MD & CEO). The bank, which received the Securities and Exchange Board of India (SEBI) nod for its IPO in October 2022, said the planning for the IPO is in the process and we are evaluating the market conditions.

“Utkarsh Small Finance Bank is in the process of becoming a listed entity and has filed its draft offer document with SEBI. The launch of the IPO is dependent on various factors including market conditions. The company is continuously evaluating the market conditions and will launch the IPO once the management deems appropriate,” said Singh.

Earlier, the lender had filed a draft red herring prospectus (DRHP) in July 2021 to raise Rs 1,350 crore comprising a new issue worth Rs 750 crore and an offer for sale (OFS) for Rs 600 crore by its promoter Utkarsh Coreinvest.

But, in August 2022, it filed revised draft papers with SEBI for the IPO and cut the issue size by 63 percent to raise Rs 500 crore via the IPO. The lender’s initial plan was to raise Rs 1350 crore from the IPO.

The lender did not mention reasons behind cutting the IPO size. When asked about a possible timeline for the launch, Singh said any IPO launch information will be disseminated in accordance with applicable laws.

Incorporated in 2016, Utkarsh Small Finance Bank commenced operations in 2017 and its products include a range of deposit products, including saving accounts, salary accounts, current accounts, recurring and fixed deposits and locker facilities. As on March 2022, its operations are spread across 22 states and Union Territories with 686 banking outlets and 12,617 employees serving 3.14 million customers majorly located in rural and semi urban areas primarily in the states of Bihar, Uttar Pradesh and Jharkhand.

Its gross loan portfolio grew from Rs 6,660.95 crore as of March 31, 2020 to Rs 10,630.72 crore as of March 31, 2022, while the total deposits almost doubled from Rs 5,235.21 crore to Rs 10,074.18 crore during the same period.