With operations spanning over a decade, Suryoday Small Finance Bank has emerged as one of the leading financial institutions in the country. The small finance bank has one of the best net interest margins, return on asset, yield and deposit growth. In FY20, Suryoday Small Finance Bank had the lowest cost-to-income ratio among Indian SFBs. The company is launching its initial public offering and here are all the details about the issue date, price, face value, lot size, allotment date and listing date.
The initial public offering of Suryoday Small Finance Bank will open on March 17 and close on March 19. The allotment date for the public issue is March 24 and the credit of share to demat account will take place on March 25. The tentative date for listing is March 30. The offering comprises 20,061,796 equity shares of the small finance bank with a face value of Rs 10 each.
The IPO consists of a fresh issue of up to 8,150,000 shares and an offer for sale of up to 10,943,070 shares. The bank expects to raise Rs 581 crore through the issue. The selling shareholders include International Finance Corporation, Gaja Capital Fund II Ltd, DWM (International) Mauritius Ltd, HDFC Holdings Ltd, IDFC First Bank Ltd, Kotak Mahindra Life Insurance Company Ltd, Americorp Ventures Ltd and Polaris Banyan Holding Pvt Ltd. The proceeds received from the offer for sale portion will accrue to each shareholder in proportion to the shareholding. The bank will not receive any funds from the offer for the sale portion. The bank has proposed to utilise the net proceeds from the issue for augmenting the bank’s tier 1 capital base to meet capital requirements in the future.
The price band for Suryoday Small Finance bank IPO has been fixed at Rs 303-Rs 305. Investors can make a bid for a minimum of 49 shares and in multiples after it. The minimum investment for each lot of shares will be Rs 14,945. Retail investors can bid for a maximum of 13 lots, amounting to Rs 194,285. The public issue is being done through the book-building process.
In accordance with SEBI guidelines, not more than 50% of the net issue shall be allocated on a proportionate basis to QIBs (Qualified Institutional Buyers). The bank and the selling shareholders, in consultation with the book running lead managers, can allocate up t0 60% of the QIB portion to anchor investors on a discretionary basis, of which one-third shall be reserved food domestic mutual funds, subject to valid bids from domestic mutual funds at an allocation price at or above the anchor investor allocation price.
If shares reserved for anchor investors remain unsubscribed or unallocated, the balance shares will be transferred to the net QIB portion. Additionally, 5% of the net QIB portion should be available for subscription by mutual funds on a proportionate basis, while the remainder of the net QIB should be available for all QIBs, including mutual funds. Moreover, a minimum of 15% of the net issue should be demarcated for non-institutional bidders and 35% for retail investors. Suryoday Small Finance Bank IPO has a reservation of 5,00,000 for eligible employees.
The company was incorporated in 2008 but started offering banking services in 2017. The SFB had 482 branches and a customer base of 14.3 lakh as of July 31, 2020. The company offers small-ticket loans like shopkeeper loans, Vikas loan and MFI loans, along with digital banking services. The promoters of the bank are Baskar Babu Ramachandran, P. Surendra Pai, P. S. Jagdish and G. V. Alankara. In the year ended March 2020, the bank recorded revenues of Rs 8.54 billion and profit after tax of Rs 1.11 billion.
One has to mandatorily use the ASBA (Application Supported by Blocked Amount) for subscribing to the public issue. The system blocks the relevant amount in the bank account of the bidder. The amount gets deducted only in the case of allotment. The book running lead managers to the issue include Axis Capital Ltd, ICICI Securities Ltd, IIFL Securities Ltd, and SBI Capital Markets Ltd. The registrar to the Suryoday Small Finance Bank issue will be Kfin Technologies Private Ltd.
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