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SEBI approves Fincare Small Finance Bank’s IPO of Rs. 1,330 Cr

05 August 20224 mins read by Angel One
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Digital lender Fincare Small Finance Bank has received SEBI’s approval to obtain Rs. 1,330 crores via its initial public offering.

It had filed for its IPO with the market regulator in May and received the ‘observations’ from the market regulating body on 28 July.

These observations from SEBI are essential for every firm that wishes to go for IPO, rights issue, or follow-on public offer.

A Close Look at Fincare SFB

Fincare is a Bengaluru-based micro-financing company that began its journey in 2017. Before becoming a small finance bank, Fincare carried out its businesses through Disha Microfin and Future Financial services.

Gujarat-based Disha Microfin offered microloans to the female population of western India. Future Financial Services was focused on the southern region.

In 2017, Fincare SFB obtained its banking license from RBI, and today, it provides a wide range of banking services to over 25 lakh customers. Its offerings comprise fixed deposits, savings accounts, recurring deposits, gold loans, two-wheeler loans, cash overdrafts, microloans, and more.

The majority of stakes at Fincare belong to Future Financial Services. However, the parent firm wishes to trim down its stake from 78.57% to 40% over a period of 3 – 5 years. Other prominent promoters of Fincare SFB include True North Fund, Wagner, and Omega TC Holdings.

How is the Financial Track Record of Fincare?

Fincare comes with a robust and consistently impressive financial record. It enjoyed the highest growth rate among competitors of comparable sizes till 2020. In addition, the loan book of the bank witnessed a massive jump from Rs. 2,154.37 crores to Rs. 5,547.58 crores within just 2 years.

Fincare managed to become the best-performing small finance bank along with having the best ROA and ROE in the last financial year.

About Fincare Small Finance IPO

According to its DRHP, the IPO will comprise a fresh issue of equity shares worth Rs. 300 crores. In addition, there would be an OFS (Offer for Sale) of Rs. 1,000 crores by its promoter, Fincare Business Services Ltd. This offer will also include a reservation for subscriptions by Fincare employees.

Fincare will use the proceeds from its IPO for the following purposes:

  • Utilise proceeds from the fresh issue to increase its Tier-1 capital so that it can meet various future expenses.
  • Use a specific portion to fund expenses related to its IPO.

The IPO date isn’t fixed yet. However, analysts expect the IPO to begin anytime around late 2021. More details about the price band, face value, a minimum and maximum lot will be available as and when released by Fincare.

Parting Thoughts

SEBI’s approval will definitely set the ball rolling for Fincare’s initial public offering. Those interested in this IPO can stay updated with the latest developments through Angel One blogs.

 

Frequently Asked Questions

  1. Who are the merchant bankers to this IPO?

Axis Capital, SBI Capital Markets, ICICI Securities, and IIFL Securities are merchant bankers to this IPO.

  1. Where will Fincare IPO be listed?

Fincare IPO will be listed on both NSE and BSE.

  1. Can I apply for Fincare IPO using UPI?

You can. However, you should have a valid UPI ID connected with your bank account.

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