KOLKATA:
Suryoday Small Finance Bank has raised Rs 150 crore from SBI Life Insurance Company and Axis Asset Management Company in a pre-IPO placement, valuing the bank at Rs 2,700 crore.
The pre-IPO placement was made at Rs 291.75 a share ahead of its likely initial public share sale that seeks to garner Rs 550-600 crore. The public issue is likely later this month.
The bank may attract 5-10% premium over the pre IPO price, people involved in the process said. Pre-IPO purchases of shares cannot be offloaded for a year.
A pre-IPO placement is a sale of a large chunk of shares ahead of an IPO. Normally, the price of equity shares at the time of public offer comes at a premium over the pre-IPO price.
It is learnt that SBI Life has invested Rs 90 crore while Axis Asset Management Co has put in Rs 60 crore.
Suryoday declined to comment, while SBI Life and Axis AMC did not respond to mails.
Suryoday would be the fourth small finance bank to come out with IPO after AU Small Finance Bank, Equitas Small Finance Bank and Ujjivan Small Finance Bank. Unlike Equitas and Ujjivan, Suryoday has no holding company.
ESAF Small Finance Bank is also preparing for its public offer, which is likely to be in next fiscal, while Utkarsh Small Finance Bank has recently sought market regulator Securities & Exchange Board of India’s approval for public share sale. Reserve Bank of India has mandated small finance banks to get listed within three years of reaching a net worth of Rs 500 crore.
The non-operating holding companies of both Equitas and Ujjivan are also listed.
The market capitalization of Equitas Holdings is Rs 3,093 crore at the end of Tuesday’s trade, while that of Equitas Small Finance Bank is Rs 6,618 crore. Market cap of Ujjivan Financial Services is Rs 2,957 crore while that for the Ujjivan Small Finance Bank is Rs 5,919 crore.
Equitas Small Finance Bank had its loan portfolio at Rs 17,373 crore at the end of December 2020, while Ujjivan Small Finance Bank had it at Rs 13,638 crore.
Suryoday’s gross loan portfolio was Rs 3,711 crore at the end of March 2020 with 76% of it constituting microloans to women borrowers. The bank also has commercial vehicle loans, affordable housing loans and loans to small and medium enterprises in its bouquet of products. It’s net interest margin for FY20 was 11.92%. Suryoday’s loan portfolio grew to around Rs 3,900 crore at the end of December.
The bank’s average collection efficiency, a measure of future asset quality, was at 82% for the month of December while it was lower in three key states — Maharashtra, Tamil Nadu and Odisha. These three states together account for 77% of its lending businesses.
The bank’s IPO includes fresh issue of up to 11.59 million equity shares and an offer for sale of up to 8.4 million equity shares. Existing investors such as International Finance Corporation, Gaja Capital, DWM (International) Mauritius, IDFC First Bank, Kotak Mahindra Life Insurance and Polaris Banyan Holding will be paring their stakes through the offer for sale, according to the draft red herring prospectus.