Author: Don Obrien

Capital Small Finance Bank files draft papers with Sebi for IPO

MUMBAI: Capital Small Finance Bank has filed a draft red herring prospectus with the Securities Exchange Board of India (Sebi), seeking to raise funds via an initial public offering (IPO).

The IPO consists of a fresh issue equity shares worth 450 crore and an offer for sale of up to 3.84 million shares by existing shareholders and promoters.

The OFS will see sale of up to 3.37 lakh shares by PI Ventures LLP, up to 6.04 lakh shares by Amicus Capital Pvt Equity I LLP, among others.

Proceeds from the issue will be used to augment tier-I capital base to meet the bank’s future capital requirements. As of June 2021, its tier I capital base was at 4.46 billion. Its capital to risk (weighted assets ratio) was 21.12%.

Edelweiss Financial Services, Axis Capital and SBI Capital Markets are the lead managers to the issue.

The lender’s main focus is on providing products and services to middle income segment customers in their areas of operations. It is backed by a number of institutional investors and financial institutions including SIDBI, PI Ventures LLP, OIJIF II, Amicus, ICICI Prudential, and HDFC Life.

As of June 2021, deposits were at 54.83 billion compared with 46.87 billion a year ago. Advances stood at 36.42 billion versus 31.45 billion last year.

For the June quarter, net interest income rose 20% from a year ago to 570.49 crore. Net profit was at 12.18 crore, up from 6.8 crore. Net non-performing assets increased to 1.44% from 1.27%. Provisions and contingencies rose to 10.40 crore against 8.78 crore. CASA ratio was at 40.48% versus 37.21%.

The lender is present in four states–Punjab, Haryana, Rajasthan and Delhi–with 159 branches and 161 ATMs.

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Oliver Bolt

Oliver Bolt

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