About Fincare Small Finance Bank IPO
Fincare Small Finance Bank is a digital-first financial services provider. It caters to the requirements of banked and unbanked individuals residing in the rural as well as semi-urban areas of India. It was formed following a merger of Future Financial and Disha Microfin. In the first quarter of FY2020, Fincare Small Finance Bank was added in the Second Schedule of the Reserve Bank of India Act, 1934.
Fincare Small Finance Bank IPO Objectives :
- Augmentation of its Tier- 1 capital base
- Fulfilment of general corporate purposes
Fincare Small Finance Bank IPO - Details
Fincare Small Finance Bank has filed preliminary papers with SEBI to raise Rs. 1,330 crores via an initial public offering. The Bengaluru-based company’s IPO will include a fresh issue worth Rs. 330 crores along with an offer for sale of Rs. 1,000 crores by the company’s promoter, Fincare Business Services Limited.
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Listing at NSE, BSE
Fincare Small Finance Bank IPO Important Dates
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Why Should You Invest in Fincare Small Finance Bank IPO?
Fincare Small Finance has an adequate capital position which is well-supported by a multifaceted investor base. Furthermore, the company has an efficient and highly experienced management team that has been able to adjust the risk management processes according to the evolving nature of business.
Considering Fincare Small Finance Bank’s current position, it appears that it will be able to expand its operations, which is enticing for investors. Accordingly, one may consider subscribing to this company’s initial share sale.
|Financial Year||Total Assets (in million)||Total Revenue (in million)||Total Expenses (in million)||Total Profit/Loss after Tax (in million)|
|2018||Rs. 22,741.15||Rs. 3,504.98||Rs. 4,480.48||(Rs. 795.46)|
|2019||Rs. 41,717.40||Rs. 6,748.82||Rs. 5,729.02||Rs. 224.34|
|2020||Rs. 71,162.74||Rs. 12,157.20||Rs. 10,722.71||Rs. 1,372.74|
|For the year ended 31 December 2020||Rs. 76,233.77||Rs. 9,983.06||Rs. 8,943.79||Rs. 2,010.01|
How to apply for Fincare Small Finance Bank IPO?
You can apply for the Fincare Small Finance Bank IPO in these ways:
Link your bank account to a reliable UPI ID and register it with your Angel One account. Proceed to book Fincare Small Finance Bank IPO shares using the ID, confirm the payment on the UPI app, and block the amount for allotment.
Fincare Small Finance Bank IPO – Noteworthy Highlights
Here are some essential highlights in relation to Fincare Small Finance Bank:
1. This company recorded the highest growth rate in terms of advances from FY2018 to FY2020.
2. In FY2020, Fincare Small Finance Bank recorded the best adjusted ROA and ROE among the small finance banks in India.
3. The promoter of this company is Fincare Business Services Limited.
4. Fincare Small Finance Bank has raised funds worth Rs. 1.9 billion over 1 round.
Fincare Small Finance Bank IPO - SWOT Analysis
- Sufficient capital position: Fincare Small Finance Bank has maintained a favourable capital position despite uncertainty in asset quality owing to socio-political concerns. In FY2020, this company raised funds worth Rs. 95 crores by issuing rights to its existing shareholders.
- Highly experienced management team: This company has an efficient management team comprising experienced professionals from different segments of the financial services sector. The leadership team continues to remain stable with Mr. Keyur Doshi, Mr. Rajeev Yadav, and others.
- Sufficient risk management systems: Fincare Small Finance Bank has been able to adjust its processes according to the growing scale of operations and the evolving nature of business, primarily focusing on technology. The company’s efficient internal control and audit systems have also remained intact.
- Low portion of CASA: In relation to overall external borrowings, the proportion of CASA continues to remain low in comparison to most of its banking peers.
- High operating costs: After this company converted into a bank in 2017, its operating expenses surged to over 9%, owing to the cost of transitioning. Some of the new expenses included costs incurred for the upgrade of branch infrastructure and the increasing cost of technology.
- Customers’ credit risk profile: The customer base of Fincare Small Finance Bank primarily comprises individuals with a below-average credit profile. Many of them belong to the semi-skilled self-employed division. As a result, these customers can face issues in relation to cash flow after the pandemic-induced economic slowdown, which would impact their repayment capability.
- Sustainable growth in operating scale: With the company in a favourable position to ensure a sustained increase in the scale of operations, there appears to be an excellent opportunity for this company. Furthermore, if it is able to raise deposits with a longer tenure while maintaining sufficient liquidity, this company can witness substantial growth.
- Deterioration of asset quality: The higher GNPA owing to deterioration in asset quality along with the weakening of this company's earnings profile poses a significant threat. Also, Fincare’s inability to increase the proportion of CASA is concerning.
- Reputation: One of the major strengths of Aditya Birla Sun Life AMC is its market reputation. Being in this business for more than 20 years, the company has delivered consistent returns. This brand image creates a base for the company to scale further.
- Strong distribution channel: The company has a vast distribution channel that helps it to cater to a larger demographic.
- Strong investment team: The investment team behind the scene led by experienced fund managers rely on research and analysis to ensure expected returns.
- Inconsistent growth in revenue: The revenue growth for ABSL AMC has been inconsistent at times, which can be a concern.
- Heavy reliance on distributors: The operation relies heavily on distributors, which can sometimes be an issue.
- Low industry penetration: Aditya Birla Sun Life AMC operates in an underpenetrated business segment with considerable potential.
- Tough competition: Aditya Birla Sun Life is working in a segment where its rivals are already listed and hold a significant market share.
Competitive Analysis: Market Peers
|Name of the Company||Fincare Small Finance Bank||Bandhan Bank||CreditAccess Grameen Bank||AU Small Finance Bank|
|Earnings Per Share (EPS)||24.43||18.78||23.20||22.78|
|Total Income (Rs.)||12,157.20 million||30,237.37 million||17,054.80 million||49,919.76 million|
|Return on Net Worth (RoNW)||15.87%||19.90%||11.27%||15.42%|
|Face Value||Rs. 10 per share||Rs. 10 per share||Rs. 10 per share||Rs. 10 per share|
Fincare Small Finance Bank IPO FAQs
How can investors apply for Fincare Small Finance Bank IPO via Angel One App?
Step 1: Open the Angel One app and Navigate to the ‘Investment Opportunities’ section
Step 2: After entering all the required details and select “IPOs and FPOs”
Step 3: Enter your NPCI - approved UPI ID/Handle
Step 4: To finish placing the order, click on ‘invest’
Where can individuals find their UPI ID?
Can investors apply for Fincare Small Finance Bank IPO even if they do not have a UPI ID?
How can one create his/her UPI ID?
Step 1: Download the BHIM app on your phone
Step 2: Complete the verification of your mobile number
Step 3: Register the passcode as it is needed to open the mobile-based application
Step 4: Choose your bank from available options
Step 5: Upon selecting the bank, this app will fetch all details in relation to your bank account
Note that if individuals have multiple bank accounts, they will have to choose only one account.
Step 6: After registering your bank account, makes sure to set up a PIN to secure the UPI app.
After completing the steps mentioned above, you can check your UPI ID in the app’s profile section.
Why am I not being able to place my Fincare Small Finance Bank IPO order using my UPI ID/handle?
Why am i not being able to find UPI ID listed in dropdown menu on Angel One’s mobile-based app when applying for IPO?
When does an investor receive his/her UPI mandate after placing IPO order?
How do I approve the Fincare Small Finance Bank IPO mandate request?
Why is the UPI mandate request still pending even though I have approved it?
How much time does it take to approve the UPI mandate request?
Can an investor submit more than one application for Fincare Small Finance Bank IPO?
How much does it cost to apply for Fincare Small Finance Bank IPO?
How can NRIs subscribe to Fincare Small Finance Bank IPO using Angel One’s mobile-based application?
What is the cut-off price in relation to IPO, and why should one place the IPO order at a cut-off price?
Can I apply for Fincare Small Finance Bank IPO if my bank account is not linked with the Angel One app?
Can investors subscribe to Fincare Small Finance Bank IPO using their bank’s current Account?
Can an individual apply for Fincare Small Finance Bank IPO using his/her HUF’s account?
Can I subscribe to Fincare Small Finance Bank IPO using my daughter’s bank account if she’s under the age of 18?
Why my bank account hasn’t been debited even though I’ve placed IPO order?
Can investors modify their bid if they've already applied for Fincare Small Finance Bank IPO?
Are investors allowed to cancel/withdraw/delete their bid after placing IPO order?
Step 1: Navigate to the ‘Investment Opportunities’ on the Angel One app
Step 2: Go to the “IPOs and FPOs” section
Step 3: Select the “Order Book” option
Step 4: Choose the Fincare Small Finance Bank IPO order
Step 5: Select “Details”
Step 6: Once you see the “Cancel” option, select it to withdraw your IPO application
How does an investor check his/her check Fincare Small Finance Bank IPO status?
Step 1: Open the Angel One app
Step 2: Navigate to the “Investment Opportunities” section
Step 3: Select “IPOs and FPOs”
Step 4: Tap the “Order Book” option to check the application status
Why is my Fincare Small Finance Bank IPO application rejected?
- The UPI PIN or ID that you entered when approving the mandate was incorrect
- Your bank account/ DEMAT account/ UPI ID might not be mapped with the same PAN
Here’s an example:
Suppose Ravi is using Rohan’s UPI ID to subscribe to Fincare Small Finance Bank IPO with his own DEMAT account. In this case, Ravi’s application will get cancelled owing to these reasons:
- Rohan’s bank account is not linked with Ravi’s DEMAT account
- Rohan’s UPI ID is not linked with Ravi’s PAN