Utkarsh Small Finance Bank IPO to Open on July 12. Check Details
Utkarsh Small Finance Bank IPO
Utkarsh Small Finance Bank, based in Varanasi, has established a widespread presence across 26 states and union territories in India, as of March 2023.
The bank operates through 830 banking outlets and employs approximately 15,424 individuals, highlighting its significant scale and reach in the country’s financial sector.
The bank’s Initial Public Offering (IPO) is scheduled to open for subscription the following week. The IPO, valued at Rs 500 crore, will commence on Wednesday, July 12. Prior to the public offering, the bank will allocate shares to anchor investors on July 11.
It is important to note that only new shares will be issued during the IPO, with no shares being sold by the bank’s promoters or existing shareholders through the Offer for Sale (OFS) window.
Initially, there was a plan to include an OFS in the IPO when the draft was filed; however, subsequent revisions limited the offering to new shares only.
Regarding the gray market, there is currently no discernible activity or movement in relation to the shares of Utkarsh Small Finance Bank.
The gray market refers to the unofficial market where shares are traded prior to their official listing. It serves as an indicator of market sentiment and price expectations.
As of now, there is no significant trading or speculation occurring in the gray market for Utkarsh Small Finance Bank’s shares.
The IPO represents an important milestone for Utkarsh Small Finance Bank as it seeks to raise capital and expand its operations.
The offering provides an opportunity for investors to participate in the growth prospects of the bank and potentially benefit from its future performance.
The bank’s decision to issue only new shares indicates its focus on raising funds for business expansion and demonstrates the confidence of its promoters and existing shareholders in the bank’s prospects.
Utkarsh Small Finance Bank IPO details
Utkarsh Small Finance Bank’s IPO details have undergone revisions since its initial filing in July 2021. The bank had initially planned to issue a draft IPO worth Rs 1,350 crore, with new shares amounting to Rs 750 crore and promoter Utkarsh Coreinvest selling shares worth Rs 600 crore.
However, a new draft was filed in August 2022, resulting in a revised plan to issue new shares worth Rs 500 crore.
The IPO is scheduled to open for subscription between July 12 and July 14. Following a successful IPO, the allotment of shares will be finalized on July 19, and the bank’s entry on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) will take place on July 24. Keffin Tech has been appointed as the Registrar to the Issue, responsible for managing the IPO process and ensuring the proper allocation of shares.
The funds raised through the issuance of new shares in the IPO will serve two purposes. Firstly, they will be utilized to augment Utkarsh Small Finance Bank’s Tier-I capital base.
Tier-I capital represents a bank’s core capital, including equity and disclosed reserves, which acts as a cushion against financial losses.
Strengthening the bank’s Tier-I capital base enhances its financial stability and supports its lending and investment activities.
Additionally, the funds raised will be allocated to meet the expenses associated with the IPO issuance. These expenses may include underwriting fees, legal and regulatory compliance costs, marketing and advertising expenses, and other administrative charges incurred during the IPO process.
As of March 2023, Utkarsh Small Finance Bank’s Tier-I capital base amounted to Rs 1,844.82 crore, accounting for 18.25% of the bank’s total capital.
The capital raised through the IPO will contribute to further strengthening the bank’s capital adequacy and positioning it for future growth and expansion.
Overall, the IPO represents an opportunity for investors to participate in Utkarsh Small Finance Bank’s growth story and potentially benefit from its future performance.
The revised IPO plan reflects the bank’s strategic decision to raise capital, support its capital requirements, and facilitate its continued development as a prominent player in the small finance banking sector.
Details about Utkarsh Small Finance Bank
Utkarsh Small Finance Bank, established in 2016, commenced its operations in 2017. The bank offers a range of services catering to diverse customer needs, including savings accounts, salary accounts, current accounts, recurring and fixed deposits, as well as locker facilities.
As of March 2023, the bank has established a presence in 26 states and union territories across India, operating through a network of 830 banking outlets.
The bank has a workforce of approximately 15,424 employees, further highlighting its significant scale and presence in the banking sector.
The bank primarily serves customers from rural and semi-urban areas, with a focus on regions such as Uttar Pradesh, Bihar, and Jharkhand.
It has garnered a customer base of 3.59 million, providing financial services and banking solutions to individuals and businesses in these underserved areas.
Utkarsh Small Finance Bank has demonstrated strong financial performance, reflecting its growth and stability in the industry.
On an annual basis, the bank witnessed a significant increase in net profit, surging by 558% from Rs 61.46 crore to Rs 404.50 crore. This notable growth in profitability showcases the bank’s ability to generate sustainable earnings and efficiently manage its operations.
Moreover, the bank experienced growth in its gross loan portfolio, which expanded from Rs 10,630.73 crore to Rs 13,957.11 crore during the reported period.
This indicates the bank’s success in providing credit facilities to its customers and supporting their financial needs.
Additionally, the bank’s total deposits increased from Rs 10,074.18 crore to Rs 13,710.14 crore, reflecting customer confidence and trust in the bank’s services.
Furthermore, Utkarsh Small Finance Bank has made substantial progress in managing its non-performing assets (NPAs). The bank’s gross NPA ratio decreased from 6.1% to 3.75%, showcasing effective risk management and loan recovery measures.
Similarly, the net NPA ratio reduced from 2.31% to 1.33%, indicating the bank’s success in minimizing credit losses and maintaining a healthy asset quality.
These financial indicators illustrate Utkarsh Small Finance Bank’s sound financial health, including robust profitability, growth in loan portfolio, and improved asset quality.
The bank’s focus on serving underserved regions and its commitment to responsible banking practices contribute to its positive performance and position it for further growth in the dynamic Indian banking industry.
