ESAF Small Finance Bank IPO: 10 things to know before subscribing to Rs 463 crore issue

The ESAF Small Finance Bank IPO will go on sale on November 3. The bank intends to raise Rs 463 crore through the public offering. Following its listing, it will be the sixth lender in the small finance market to be eligible for trade on the bourses. Equitas Small Finance Bank, AU Small Finance Bank, Ujjivan Small Finance Bank, Suryoday Small Finance Bank, and Utkarsh Small Finance Bank are currently listed on the stock exchanges.

Here are the top ten things you should know before signing up for the offer:

1) IPO Dates

The IPO will open for subscription on November 3 and finish on November 7.

2) Price Band

The range of Rs 57-60 per share has been determined as the issue price.

3) Offer Details

ESAF Small Finance Bank public offer consists of a new issue of 6.51 crore shares worth Rs 390.7 crore and a sale of 1.2 crore shares for Rs 72.3 crore. In the OFS, promoter ESAF Financial Holding would sell shares worth Rs 49.26 crore, while investors PNB Metlife India Insurance Company will sell Rs 12.67 crore in shares and Bajaj Allianz Life Insurance Company will sell Rs 10.37 crore in shares. The issue includes a reservation of Rs 12.5 crore in shares for its employees, who would get them at a discount of Rs 5 per share from the final issue price.

4) Objectives of Issue

The net proceeds from the fresh issuance will be put toward developing the bank’s operations, principally through onward lending, and bolstering the bank’s Tier-I capital base to meet future capital requirements.

5) Lot Size

Each investor can place a bid for a minimum of 250 equity shares and in increments of 250 thereafter. Therefore, the lowest possible investment for an individual investor would be Rs 14,250 (250 (Lot size) x 57 (lower price band)). Maximum bids can reach Rs 15,000 in this auction.

6) Company Profile

Customers in rural and semi-urban areas can get loans from ESAF Small Finance Bank. Microloans, retail loans, loans to small and medium-sized businesses, and loans to other banks are all available through this organization. Across 21 states and 2 territories, the bank operates a network of 700 branches (including 59 branches run by business correspondents), 767 customer care centers, and 559 automated teller machines.

7) Financials

The net profit for ESAF Small Finance Bank for the fiscal year that ended in March 2023 increased by 452 percent, reaching Rs 302.33 crore from Rs 54.73 crore the previous year. With deposits up 14.4 percent to Rs 14,665.6 crore and disbursements up 23 percent to Rs 14,690.6 crore, net interest income for the year climbed by 60 percent on-year to Rs 1,836.3 crore. Gross non-performing assets decreased by 451 basis points year over year to 1.65 percent by the end of the June FY24 quarter, while net NPA decreased by 297 basis points year over year to 0.81 percent.

8) Lead Managers

ICICI Securities, Dam Capital Advisors, and Nuvama Wealth Management are acting as book-running lead managers for the issuance, with Link Intime India serving as the registrar.