Tag: IPO

Report, BFSI News, ET BFSI

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Five of the top 10 Indian entities to have listed on the bourses are from the BFSI sector, according to a report by Praxis Global Alliance titled “India Investments Pulse 2020”. Contextually, 43 Indian companies raised $3.6B in the public markets in 2020, as compared to $1.8B in the previous year. Of these, five BFSI entities including SBI Card, CAMS, UTI Mutual Fund, Angel Broking and Equitas Small Finance Bank ranked amongst the top 10 Indian IPOs of the year.

SBI Card and Payment Services, which was amongst the first IPOs to be listed days before India went into a stringent lockdown to curb the spread of the COVID-19 pandemic, raised $1381M from its offer. Registrar and transfer agent entity Computer Age Management Services (CAMS), which listed in October 2020, raised $299M through its offer.

During October 2020, two more BFSI entities, namely UTI Mutual Fund and Angel Broking raised $288M and $80M, respectively. Small Finance Bank Equitas, on the other hand, having listed in November, raised $69M from its public issue.

BFSI exits

Two BFSI entities, namely SBI Card and AU Small Finance Bank, also featured amongst the Top 10 exits of 2020. The Carlyle Fund through a public market sale worth $951M, partially exited its investment in SBI Card. AU Small Finance Bank also saw complete exits from Warburg Pincus, worth $173M through a public market sale, and in a separate transaction, between IFC and ChrysCapital, which exited wholly from the lender at $124M.

Private Equity entries

The BFSI sector as a whole raised approximately $3209M in terms of funds from Venture Capital and Private Entity funds, ranking fifth after the Telecom, Retail, Consumer apps and Ecommerce platforms. Amongst the Top 10 deals featured for the BFSI sector include NBFC Edelweiss which through a Late stage fund by SSG Capital and Farallon Capital raised $401M.

NBFC PNB Housing Finance also raised $234M through funding from The Carlyle Group, whilst lender RBL Bank attracted $209M through funding from Baring Private Equity Asia, ICICI Prudential Life Insurance, Gaja Capital and CDC Group. NBFC’s Indostar, DMI Finance and Homefirst Finance also raised $362M, $123M and $95M, respectively.



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Arohan Financial Services files DRHP for Rs 1,800 crore IPO, BFSI News, ET BFSI

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NEW DELHI: Arohan Financial Services on Monday filed draft red herring prospectus for its initial public offering (IPO). As per market sources, the company plans to raise between Rs 1,750-1,800 crore.

The public offer comprises a fund raise via a fresh issuance of shares amounting to Rs 850 crore. The company will have an Offer for Sale (OFS) of 27,055,893 equity shares by Maj Invest Financial Inclusion Fund II K/S, Michael & Susan Dell Foundation, Tano India Private Equity Fund II, TR Capital III Mauritius and Aavishkaar Goodwell India Microfinance Development Company II Ltd collectively.

The portion reserved for qualified institutional buyers will be up to 50 per cent of the offer, non-institutional investors will have up to 15 per cent of the portion reserved while up to 35 per cent will be reserved for retail investors. The portion reserved for eligible employees will be up to 5 per cent of the offer.

As stated in the DRHP, the company may decide to undertake a pre-IPO placement of Rs 150 crore subject to consultation of the merchant bankers. Net proceeds from the fresh issue will be utilised for augmenting the company’s capital base to meet their future capital requirements which is expected to be deployed in FY22.

As on September 30, 2020, the Kolkata-based company which commenced its operations in 2006, has served approximately 2.21 million borrowers across 17 states and stands as the largest NBFC-MFI in eastern India as per gross loan portfolio. It offers a broad range of products across credit and financial instruments.

Between FY17-FY20, Arohan Financial Services, as per a CRISIL report, had the second highest gross loan portfolio growth at 68 per cent CAGR and stood amongst top five NBFC-MFIs in India. Arohan Financial also had the highest customer growth at 49 per cent CAGR between FY18-FY20. The company’s disbursements, AUM, total comprehensive income has been growing YOY and as on FY20 stood at a CAGR of 110.03 per cent.

The microfinance business of the company operates out of 710 branches across 11 states and the MSME lending business has a reach across eight states through its 10 branches.

Edelweiss Financial Services Ltd, ICICI Securities Ltd, Nomura Financial Advisory and Securities (India) Private Limited and SBI Capital Markets Limited are the book running lead managers (BRLMs) to the issue.



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Warburg ups stake in Home First Finance to 30.62%

Banking & Finance

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Warburg Pincus has acquired an additional 5.03 per cent in Home First Finance Company India Ltd, an affordable housing finance company. 

The stake has been acquired by Orange Clove Investments B.V., an affiliate of the private equity funds managed by Warburg Pincus. 

Orange Clove now owns 30.62 per cent of the paid-up equity share capital of the company. 

“This Transaction will help Home First diversify its shareholder’s base and boost stakeholder’s confidence in the company’s growth. Warburg Pincus considers this as a great opportunity to expand its investments in the financial services sector in India and believes that the existing association will help Home First to further strengthen its financial position and growth prospects,” said a press statement. 

Home First has sanctioned home loans to more than 50,000 customers in 60 districts, across 11 states and one union territory. 

 

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IRFC IPO to raise Rs 4,600 cr; issue opens on Jan 18, BFSI News, ET BFSI

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The initial public offering (IPO) of Indian Railway Finance Corporation (IRFC) worth about Rs 4,600 crore will hit the market on January 18, Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey said on Wednesday. “IRFC coming up for listing with a Rs 4600 cr+ issue in a price band of Rs 25-26 per share. Anchor book on Jan 15 and the main book from Jan 18-20,” he tweeted.

This will be the first IPO by a railway non-banking financial company (NBFC).

In January 2020, IRFC had filed draft papers for its IPO.

The issue is of up to 178.20 crore shares, comprising a fresh issue of up to 118.80 crore shares and offer for sale of up to 59.40 crore shares by the government, according to the draft prospectus.

The company’s principal business is to borrow funds from the financial markets to finance acquisition/ creation of assets which are then leased out to the Indian Railways.

IRFC, set up in 1986, is a dedicated financing arm of the Indian Railways for mobilising funds from domestic as well as overseas markets. Its primary objective of IRFC is to meet the predominant portion of ‘extra budgetary resources’ requirement of the Indian Railways through market borrowings at the most competitive rates and terms.

The Union Cabinet had in April 2017 approved listing of five railway companies. Four of them — IRCON International Ltd, RITES Ltd, Rail Vikas Nigam Ltd and Indian Railway Catering and Tourism Corp — have already been listed.



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LIC IPO: Govt appoints Milliman Advisors to determine ’embedded value’ of the insurer

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The Government on Thursday took one more step towards Initial Public Offer (IPO) of Life Insurance Corporation of India (LIC) by appointing Reporting Actuary.

“Government has selected Milliman Advisors LLP India as the Reporting Actuary for the Embedded Value of LIC,” Secretary of Department of Investment and Public Asset Management (DIPAM), Tuhin K Pandey said in a tweet. Further, he mentioned that work to start soon. Apart from Milliman, EY Actuarial Services LLP and Willis Towers Watson Actuarial Advisory LLP were in the fray.

 

According to the Indian subsidiary of US-headquartered Milliman, the firm claims to be among the world’s largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance, financial services, and employee benefits. Founded in 1947, it is an independent firm with offices in major cities around the globe.

DIPAM is a department under the Finance Ministry and is responsible for disinvestments and working together with the Financial Services Department for selling part of Government’s share in LIC.

Indian Embedded Value

Earlier, DIPAM floated a Request for Proposal (RFP) to appoint an actuary for determining the Indian Embedded Value (IEV) for LIC. The IEV is a measure of the consolidated value of shareholders’ interest in the life insurance business within the meaning of the Insurance Act, 1938, and applicable IRDAI regulations. It is one of the pre-conditions of the initial public offer (IPO) for LIC, and it needs to be determined by an independent actuary.

IRDAI regulations require an applicant company to file the ‘Embedded Value’ before an IPO. The valuation report needs to be prepared by an independent actuary and peer-reviewed by another professional.

In her FY 2020-21 Budget speech, Finance Minister Nirmala Sitharaman proposed to sell a part of its holding in LICI by way of Initial Public Offer (IPO). This IPO is critical to meet the ₹2.10 lakh crore proceed. O-ut of this target ₹90,000 crore is to be collected through selling stakes in LIC and IDBI Bank while ₹1.10 lakh crore is to be mobilised through stake sales, buyback etc. of Central Public Sector Enterprises (CPSEs).

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