Another small finance bank is back with its IPO plans

• ESAF Small Finance Bank said that it is refiling its DRHP to raise ₹629 crore via a public issue.
  
• It had earlier filed a DRHP in July 2021, but never went ahead with the issue.
  
• The net proceeds from the fresh issue will be used to augment the bank’s Tier – I capital base.
  

Right after Utkarsh Small Finance Bank announced the price band for its IPO, a similar bank has revived its plans to go for a public issue.

ESAF Small Finance Bank said that it is refiling its DRHP to raise ₹629 crore via a public issue. It had earlier filed a DRHP in July 2021, but never went ahead with the issue.

The IPO will include a fresh issue up to ₹486.74 crore and an offer for sale of up to ₹142.30 crore by promoter and other selling shareholders.

The net proceeds from the fresh issue will be used to augment the bank’s Tier – I capital base to meet its future capital requirements.

The offer for sale comprises shares worth up to ₹119.26 crore by ESAF Financial Holdings Private Limited, up to ₹12.67 crore by PNB MetLife India Insurance Company Limited and up to ₹10.37 crore by Bajaj Allianz Life Insurance Company Limited.

ESAF Small Finance Bank said that it may consider a further issue of equity shares by a private placement or any other method aggregating up to ₹97.33 crore. If such placement is completed, the fresh issue size will be reduced, the bank said in a press release.

39% compounded annual growth rate in AUM

Between FY21 and FY23, the bank’s assets under management (AUM) grew from ₹8,425.93 crore to ₹16,331.27 crore, with a compound annual growth rate (CAGR) of 39.22%.

Deposits also increased from ₹8,999.43 crore to ₹14,665.63 crore during the same period, registering a CAGR of 27.66%. As of March 31, 2023, its retail deposits ratio stood at 90.8%.

The bank has a network of 700 banking outlets, 743 customer service centers operated by its business correspondents spread across 21 states and two union territories. It claims to serve a customer base of 6.83 million as of March 31, 2023.

ICICI Securities, DAM Capital Advisors and Nuvama Wealth Management are the book running lead managers and Link Intime India is the registrar to the offer.