ESAF Small Finance Bank IPO Worth ₹463 Crore to Open on November

ESAF Small Finance Bank, the prominent Kerala-based financial institution, is set to embark on its initial public offering (IPO) journey, with plans to raise ₹463 crore from the capital markets. The IPO is scheduled to open on November 3, 2023, and will conclude on November 7, offering an opportunity for investors to become a part of this thriving banking venture.

The pricing details, or the price band for the ESAF Small Finance Bank IPO, are yet to be unveiled. This public offering is structured as a combination of a fresh issuance of equity shares and an offer for sale, presenting a significant opportunity for potential investors.

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The IPO comprises a fresh issuance of equity shares worth ₹390.7 crore by the company, demonstrating their commitment to growth and expansion. Additionally, an offer-for-sale (OFS) of equity shares worth ₹72.3 crore will be provided by three shareholders, further enhancing the diversity of ownership.

In the offer for sale (OFS) segment, ESAF Financial Holdings, one of the promoters, is planning to sell shares worth ₹49.26 crore. PNB MetLife India Insurance Company and Bajaj Allianz Life Insurance Company will also participate by offloading shares worth ₹23.04 crore, contributing to the variety of shareholders in this exciting venture.

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The company is slated to finalize the basis of allotment of IPO shares on November 10, with the shares set to be credited to the demat accounts of eligible investors on November 15. ESAF Small Finance Bank shares are expected to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on November 16, opening up new avenues for trading and investment.

In a bid to cater to various investor categories, ESAF Small Finance Bank has allocated approximately 50% of the issue for qualified institutional buyers (QIB), 15% for non-institutional investors, and 35% for retail investors in the IPO. Moreover, the bank has reserved equity shares worth up to ₹12.5 crore for its dedicated employees, underscoring their commitment to their workforce.

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The book-running lead managers for the ESAF Small Finance Bank IPO are ICICI Securities, DAM Capital Advisors, and Nuvama Wealth Management, while Link Intime India has been appointed as the IPO registrar. This team of financial experts is set to ensure a smooth and successful IPO process.

The bank’s strategic aim with this IPO is to utilize the net proceeds from the fresh issue to fortify its Tier-I capital base, aligning itself for future capital requirements and expansion opportunities.

ESAF Small Finance Bank had previously filed its draft IPO papers with the Securities and Exchange Board of India (SEBI) in July and subsequently received approval from the capital markets regulator on October 17, 2023, marking a significant milestone in their journey towards going public.

As of March 31, 2023, ESAF Small Finance Bank boasts an impressive network of 700 banking outlets and 767 customer service centers, demonstrating a robust and expansive presence in the financial landscape.

In terms of financial performance, the bank’s net profit for FY23 has surged to ₹302.3 crore, a remarkable increase from ₹54.73 crore in FY22. Their net interest income (NII) for FY23 also witnessed a substantial 60% year-on-year growth, reaching ₹1,836.3 crore.

Notably, ESAF Small Finance Bank has experienced a remarkable growth trajectory in its asset under management (AUM), surging from ₹8,425.93 crore as of March 31, 2021, to ₹16,331.26 crore as of March 31, 2023, reflecting a compound annual growth rate (CAGR) of 39.22%. This growth rate stands out as the highest among its peers, affirming the bank’s competitive position in the industry.

In terms of deposits, the bank has demonstrated significant progress, with deposits growing from ₹8,999.42 crore in March 2021 to ₹14,665.62 crore in March 2023, representing a CAGR of 27.66%. This growth in deposits underscores the trust and confidence that customers have in ESAF Small Finance Bank.

With its robust financial performance and a well-structured IPO plan, ESAF Small Finance Bank is poised for an exciting new chapter in its journey, offering investors an opportunity to be part of a promising banking enterprise. As the IPO opens on November 3, it promises to be a significant event in the financial market landscape.

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