Utkarsh Small Finance Bank GMP IPO Details
Utkarsh Small Finance Bank Ltd, headquartered in Varanasi, is one of the leading Small Finance Banks (SFBs) in India and has achieved the second-fastest growth in Assets Under Management (AUM) among SFBs with AUM exceeding Rs. 50 billion, during Fiscal 2019 and Fiscal 2022. The bank primarily focuses on providing microfinance services to the unserved and underserved segments of the population.
The company maintains a diverse product portfolio, with microfinance being a key focus area. In comparison to its peers, Utkarsh Small Finance Bank stands alongside other notable SFBs such as Equitas Small Finance Bank, Ujjivan Small Finance Bank Limited, Credit Access Grameen Limited, Spandana Sphoorty Financial Limited, Bandhan Bank Limited, AU Small Finance Bank Limited, and Suryoday Small Finance Bank.
Utkarsh Small Finance Bank Ltd
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Utkarsh SFB IPO Objectives
The objectives of the Utkarsh Small Finance Bank IPO are as follows:
- Augmenting Tier-1 capital base: The company plans to utilize the net proceeds from the IPO to strengthen its Tier-1 capital base. This will help meet its future capital requirements and support the bank’s growth plans.
- Meeting expenses related to the Issue: The funds raised through the IPO will also be used to cover the expenses associated with the offering, including underwriting, legal, and marketing expenses.
By achieving these objectives, Utkarsh Small Finance Bank aims to enhance its financial position and support its expansion strategies.
Utkarsh IPO details
Utkarsh Small Finance Bank Limited, an SFB (Small Finance Bank) in India, is scheduled to open its IPO on 12th July and close on 14th July.
The IPO comprises a total issue of 200,000,000 shares, amounting to ₹500.00 Crores. The price band for the issue has been set at Rs.23 to Rs.25 per share. The lot size for the IPO is 600 shares per lot. Allotment of shares will take place on 19th July, and the listing of the shares on the stock exchanges is expected on 24th July.
The book-running lead managers for the offer are ICICI Securities Ltd and Kotak Mahindra Capital Company Limited. Kfin Technologies Limited is the registrar of the IPO. Utkarsh CoreInvest Limited is the promoter of the company.
Utkarsh Small Finance Bank IPO Details
| IPO Date | Jul 12, 2023 to Jul 14, 2023 |
| Listing Date | 24 July, 2023 |
| Face Value | ₹10 per share |
| Price | ₹23 to ₹25 per share |
| Lot Size | 600 Shares |
| Total Issue Size | 200,000,000 shares (aggregating up to ₹500.00 Cr) |
| Fresh Issue | 200,000,000 shares (aggregating up to ₹500.00 Cr) |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE, NSE |
| Share holding pre issue | 895,521,522 |
| Share holding post issue | 1,095,521,522 |
Utkarsh Small Finance Bank IPO Reservation
| QIB Shares Offered | Not less than 75% of the Offer |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
Utkarsh Small Finance Bank IPO Lot Size
The Utkarsh Small Finance Bank IPO lot size is 600 shares.
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 600 | ₹15,000 |
| Retail (Max) | 13 | 7800 | ₹195,000 |
| S-HNI (Min) | 14 | 8,400 | ₹210,000 |
| S-HNI (Max) | 66 | 39,600 | ₹990,000 |
| B-HNI (Min) | 67 | 40,200 | ₹1,005,000 |
Utkarsh Small Finance Bank IPO Timetable (Tentative)
Utkarsh Small Finance Bank IPO opens on Jul 12, 2023, and closes on Jul 14, 2023.
| Event | Tentative Date |
|---|---|
| Opening Date | Wednesday, 12 July 2023 |
| Closing Date | Friday, 14 July 2023 |
| Basis of Allotment | Wednesday, 19 July 2023 |
| Initiation of Refunds | Thursday, 20 July 2023 |
| Credit of Shares to Demat | Friday, 21 July 2023 |
| Listing Date | Monday, 24 July 2023 |
| Cut-off time for UPI mandate confirmation | 5 PM on Jul 14, 2023 |
Utkarsh Company Financial Report
| Particulars (in Rs. Crores) | FY22 | FY21 | FY20 |
|---|---|---|---|
| Revenue | 2,033.64 | 1,705.83 | 1,406.18 |
| EBITDA | 1,972.18 | 1594.02 | 1219.43 |
| PAT | 61.46 | 111.81 | 186.74 |
| Particulars (in Rs. Crores) | FY22 | FY21 | FY20 |
|---|---|---|---|
| Total Assets | 15,063.77 | 12,137.91 | 9,404.32 |
| Share Capital | – | – | – |
| Total Borrowings | 2571.93 | 2,607.82 | 2675.03 |
| Particulars (in Rs. Crores) | FY22 | FY21 | FY20 |
|---|---|---|---|
| Net cash generated from / (used in) operating activities | 1,329.15 | -83.46 | 115.20 |
| Net cash from / (used in) investing activities | -738.67 | -532.44 | -322.14 |
| Net cash flow from / (used in) financing activities | 111.34 | 171.67 | 1304.35 |
| Net increase (decrease) in cash and cash equivalents | 701.83 | -444.23 | 1097.42 |
IPO analysis
Registrar information
Name: KFin Technologies Private Limited
Phone number: +91 40 6716 2222
Email ID: utkarsh.ipo@kfintech.com
Red herring prospectus
View documents submitted by Utkarsh company in filing to understand more details about them.
Utkarsh IPO Key Points
Strengths:
- Presence in Rural and Semi-Urban Areas: Utkarsh Small Finance Bank has a significant presence in rural and semi-urban areas through its 434 banking outlets. This provides ample growth potential, considering that the rural segment contributes 47% to India’s GDP but has a low share of banking credit at only 8%.
- Strong Growth in Assets: The bank has demonstrated robust growth in assets under management (AUM) with a 31.6% increase between FY19 and FY22. The gross loan portfolio also grew by 59% to ₹10,630 crore during FY20 to FY22, reflecting the bank’s ability to expand its lending activities.
- Increase in Deposits: Utkarsh Small Finance Bank has witnessed consistent growth in deposits, from ₹5,235 crore in FY20 to ₹10,074 crore in FY22. Moreover, the ratio of Current Account and Savings Account (CASA) to total deposits improved from 13.5% to 22.3% during the same period, indicating a favorable shift towards low-cost deposits.
Opportunities:
- Untapped Rural Market: The bank’s strong presence in rural and semi-urban areas presents an opportunity to tap into the underserved population and expand its customer base. This segment has significant growth potential and can contribute to the bank’s overall profitability.
- Rising Demand for Financial Services: With the increasing financial inclusion initiatives in India, there is a growing demand for banking services in rural areas. Utkarsh Small Finance Bank can capitalize on this trend by offering tailored products and services to meet the specific needs of the rural population.
- Expansion of Lending Activities: The bank’s ability to grow its loan portfolio indicates an opportunity to further expand its lending activities. By targeting sectors with high credit demand, such as agriculture, micro, small, and medium enterprises (MSMEs), and affordable housing, the bank can enhance its market share and profitability.
Risks and Threats:
- Rise in Non-Performing Assets (NPAs): While the bank has experienced significant growth in its loan portfolio, there has also been an increase in gross non-performing assets (NPAs) from 0.71% in FY20 to 6.10% in FY22. This indicates a potential risk of loan defaults and highlights the need for effective risk management strategies.
- Regulatory Compliance: As a banking institution, Utkarsh Small Finance Bank is subject to stringent regulatory requirements. Non-compliance with these regulations can result in financial penalties, operational constraints, and reputational damage. Ensuring adherence to regulatory guidelines is crucial for the bank’s continued operations.
- Interest Rate Volatility: Volatility in interest rates or the bank’s inability to effectively manage interest rate risk can negatively impact its net interest margins. Fluctuations in interest rates can affect the cost of funds and the profitability of lending operations, posing a risk to the bank’s financial performance.
It is important for Utkarsh Small Finance Bank to address these risks, leverage its strengths, and seize the available opportunities to sustain growth, mitigate threats, and maintain a competitive position in the market.
FAQs
What is the pre-apply date for the Utkarsh Small Finance Bank IPO?
The pre-apply date for the Utkarsh Small Finance Bank IPO is not available currently.
When does pre-apply for the Utkarsh Small Finance Bank IPO open and how can you pay for it?
Pre-apply for the Utkarsh Small Finance Bank IPO usually opens two days before the launch date. Once the IPO goes live, you will receive a UPI mandate to block the application amount and successfully place your bid.
How can I apply for the Utkarsh Small Finance Bank IPO?
You can apply for the Utkarsh Small Finance Bank IPO on Upstox’s website and app when the IPO opens for subscription.
What are the opening and closing dates for the Utkarsh Small Finance Bank IPO subscription?
The opening and closing dates for the Utkarsh Small Finance Bank IPO have not been announced yet.
What is the lot size and minimum investment required for the Utkarsh Small Finance Bank IPO?
The lot size and minimum investment details for the Utkarsh Small Finance Bank IPO have not been announced yet.
What is the price band for the Utkarsh Small Finance Bank IPO?
The price band for the Utkarsh Small Finance Bank IPO is not available currently.
What is the size of the Utkarsh Small Finance Bank IPO?
The size of the Utkarsh Small Finance Bank IPO has not been announced yet.
How many bids can I place for the Utkarsh Small Finance Bank IPO?
You can place up to three bids for a single application.
Can bids be placed at different times during the IPO subscription period?
No, all bids must be placed at once. If you want to add an additional bid, you will need to delete your previous application and re-apply.
When will Utkarsh Small Finance Bank shares be credited to my demat account?
The date for crediting Utkarsh Small Finance Bank shares to demat accounts has not been announced yet.
On which exchanges will Utkarsh Small Finance Bank shares be listed?
Utkarsh Small Finance Bank shares will be listed on the NSE and BSE.
When will Utkarsh Small Finance Bank shares be listed on the exchanges?
The listing date for Utkarsh Small Finance Bank shares has not been announced yet.
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