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About Jana Small Finance Bank IPO

Formerly called Janalakshmi Financial Services, Jana Small Finance Bank is one of India’s leading scheduled commercial banks, with its headquarters in Bengaluru. The institution was established in 2008 and started its operations as a small finance bank in 2018 after receiving its final in-principle license from RBI in 2017.

This bank specialises in extending financial services to underfunded individuals. Some of its popular financial products that aid in this cause are loan schemes for MSMEs, two-wheelers, agriculture, affordable housing, and unsecured borrowing options. It also offers gold loans, fixed deposits, micro-pensions, and zero balance savings schemes with attractive interest rates. Jana Small Finance Bank currently operates across 19 Indian states via 500+ branches.

Jana Small Finance Bank IPO Objectives :

- Expand its Tier-I capital base.

- Meet the bank’s capital requirements.

- Finance expenses related to this initial public offering.

Jana Small Finance Bank IPO - Details

The company’s DRHP (Draft Red Herring Prospectus) filed with capital market regulator SEBI reveals that Jana SFB’s upcoming IPO will consist of a fresh issue worth Rs. 700 crores and an OFS comprising 92,53,659 shares.

Opening Date

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Closing Date

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Price Band

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per equity share

Issue Size

₹ - Cr

Face Value

₹ -

per equity share

Market Lot

- Shares

Opening Date

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Closing Date

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Price Band

₹ -

per equity share

Issue Size

₹ - Cr

Face Value

₹ -

per equity share

Market Lot

- Shares

Listing at NSE, BSE

Jana Small Finance Bank IPO Important Dates

IPO Open Date -
IPO Close Date -
Basis Of Allotment Date -
Initiation Of Refunds -
Credit Of Shares To
Demat ACcount
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IPO Listing Date -

Why Should You Invest in Jana Small Finance Bank IPO?

The banking industry is a primary component of India’s financial sector. The Reserve Bank of India (RBI) recorded bank credits and bank deposits amounting to Rs. 108.41 trillion and Rs. 152.98 trillion, respectively, as of 25 June 2021. Bank credit and bank deposit rose at a CAGR of 3.57% and 13.93%, respectively, over the financial years 2016-2020. All of these data signify higher credit demand and growth in banking activities, which is a huge plus for financial institutions like Jana Small Finance Bank.

Additionally, a rise in the popularity of small ticket loans post the Covid-19 crisis presents Jana SFB with immense growth opportunities. This is because micro-finance options constitute a primary product of this lending institution, as previously discussed. A consumer loan pattern analysis report published by the TransUnion CIBIL presents personal loans as the lead contributor to sub- Rs. 25,000 loan origination. This has led such small-ticket personal loans to see 23 times the growth in 2020, as compared to 2017. This presents Jana SFB with another growth opportunity for its unsecured financial products and, hence, is another green signal for potential IPO investors. However, performing in-depth research is a must for interested individuals to check if this investment opportunity aligns with their financial goals.

Financial Highlights

Financial Year Total Assets (in Rs. Millions) Total Revenue (in Rs. Millions) Total Expenses (in Rs. Millions)
2017 - 2018 97,487.85 15,970.49 41,008.44
2018 - 2019 94,462.91 13,682.68 33,173.34
2019 - 2020 1,41,471.21 24,247.66 23,946.34

How to apply for Jana Small Finance Bank IPO?

You can apply for the Jana Small Finance Bank IPO in these ways:

UPI
Link your bank account to a reliable UPI ID and register it with your Angel One account. Proceed to book Jana Small Finance Bank IPO shares using the ID, confirm the payment on the UPI app, and block the amount for allotment.

Demat Account

1. If you are already a client of Angel One, apply directly for Jana Small Finance Bank IPO, click here.
2. If you’re a new investor Open DEMAT Account for free with Angel One to begin your investment journey.

Jana Small Finance Bank IPO – Noteworthy Highlights

Jana Small Finance Bank focuses on enhancing financial inclusion by catering to individuals facing difficulty acquiring financial aid traditionally. Renowned for its microfinance products, the lender has helped over 80 lakh customers meet their fund requirements as of April 2021. Following are a few other highlights of this scheduled commercial bank –

1. Jana SFB was declared the ‘Best Inclusive Financial Services – India 2018 London’ by Capital Finance International.

2. It featured as the largest Indian corporation in ‘Fortune – The Top 500’ in 2017. It also received the ‘India’s Distinctive Goodwill Brand’ and the ‘Best Financial Sector Transaction ADB Private Sector’ awards in the same year.

3. This financial institution boasts of an extensive network of 14,452 employees as of 30 September 2019.

4. Jana SFB recorded around 30.5 lakh active customers as of 2021.

5. It received the ‘Best Financial Services Firm in India’ award from the VC circle in 2016.

Jana Small Finance Bank IPO - SWOT Analysis

strengths

Strengths

  • Robust banking network: Jana Small Finance Bank boasts of the second-most geographically diversified portfolio among Indian microfinance banks. As of 28 February 2021, this financial institution had 611 branches across India. These include 134 ATMs in 19 states, 229 districts, and 3 UTs, and 166 bank branches in unbanked rural centres.
  • Wide product range: In its quest to make easy funding solutions available to a wider customer base, Jana SFB offers numerous financial products. Among them, popular secured options include loans against FDs, gold, vehicles, MSME loans, and micro-housing finance. This financial institution also offers unsecured funding options, such as agricultural, micro-business, individual, and group loans.
  • Digital presence: The company offers its customers assisted digital onboarding channels against its financial products. Such a digitised platform speeds up the loan application and disbursal process, remarkably increasing customers’ convenience. This enhances accessibility, thus aiding in the company’s objective of financial inclusion.
  • Highly experienced senior management team: Operating in the lending sector for 14 years now, Jana Small Finance Bank boasts of a board of 6 members, including 4 independent directors. Its senior management team has remarkable expertise in financial services.
Weaknesses

Weaknesses

  • Slow recovery from losses: Jana SFB recorded a pre-provision operating loss of Rs. 576.6 crores and credit worth Rs. 1,372.5 crores in FY19. This was right after its net loss of Rs. 2,503.80 crores in 2018. The company has since taken steps to cut operating costs and introduced settlement programmes to deal better with delinquent customers.
Opportunities

Opportunities

  • Growing demand for microfinance: As already mentioned, the mass post-Covid financial crises have led to the popularity of small loans. A majority of borrowers look for funds less than Rs. 25,000 to meet requirements. This acts as great scope for Jana SFB as its primary products concern micro-loans for different purposes, such as business, housing, and more.
  • Sharp rise in MSME loan disbursals: MSMEs form the backbone of India’s economy. These small businesses were also the worst affected by the multiple pandemic-driven lockdowns. However, credit demand by MSMEs recovered to stand at 5% higher than pre-pandemic levels in March this year.
Threats

Threats

  • Rise in NPAs: Non-performing assets or delinquent loans have risen from 7.5% in September 2020 to 13.5% by the same time this year. A primary cause of this is the 2-year restructuring and moratorium on loans that the RBI previously declared to safeguard the interests of economically backwards borrowers.
  • Inadequate capital: The rise in bad loans, especially in the unsecured category, makes it difficult for banks to maintain sufficient capital to mitigate risks. Given the current scenario, banks can absorb only a 7.9% loss, while the current risk exposure stands at 36.9% of total debt in India as per an IMF report.
  • Stunted economic growth: The country’s overall economic growth has taken a backseat at the moment. This is due to the heavy losses incurred by all industries amidst the successive lockdowns. Currently, the banking sector is struggling to thrive until all other sectors recover financially.
Strenghts Strengths
Weaknesses Weaknesses
Opportunities Opportunities
Threats Threats

Strengths

  • 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.

Weaknesses 

  • 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.

Opportunities 

  • Low industry penetration: Aditya Birla Sun Life AMC operates in an underpenetrated business segment with considerable potential.

Threats 

  • 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

Jana Small Finance Bank is one of India’s leading financial service providers. However, its delayed entry into the IPO market paves the way for its competitors to make a mark. Following is a table compiling all its notable market peers along with their market capitalisation growth in last year -

Market Peers  Market Capitalisation Growth (in %)
City Union Bank 6.04%
Karur Vysya Bank 5.10%
IDFC First Bank 4.55%
AU Small Finance Bank 2.86%
Equitas Small Finance Bank 6.62%
J&K Bank 95.67%
Ujjivan Small Finance Bank 1.49%
Karnataka Bank 1.28%
South India Bank 1.00%
Dhanlaxmi Bank 0.95%
IDBI Bank 0.79%
Federal Bank 0.62%
RBL Bank 0.37%
DCB Bank 0.05%

Jana Small Finance Bank IPO FAQs

How can I apply for Jana Small Finance Bank IPO through Angel One App?

Follow these steps to apply for Jana Small Finance Bank IPO:
Step 1: Go to the 'Investment Opportunities' section on the Angel One app.
Step 2: Click on the 'IPOs and FPOs' option.
Step 3: Enter essential details.
Step 4: Provide details of an NPCI approved UPI ID/Handle.
Step 5: Click on the ‘Invest’ button to place an order.

Why am I unable to apply for Jana Small Finance Bank IPO through my UPI ID?

One can apply for Jana Small Finance Bank IPO only through NPCI approved UPI IDs. So, if you are unable to apply for this IPO through your UPI ID, it could mean the UPI handle does not feature on the list of apps approved by NPCI for providing UPI service.

Can I apply for Jana Small Finance Bank IPO if I don’t have a UPI ID?

Individuals who don’t have a UPI ID can create one in a UPI Handle that features in the NPCI list. As an alternative, investors can apply through Application Supported By Blocked Amount or ASBA either through a physical form or with the bank.

How to create a UPI ID?

Investors can create a UPI ID with BHIM app in these easy steps:
Step 1: Download the BHIM app.
Step 2: Verify mobile number.
Step 3: You will require a passcode to access the app.
Step 4: Select a bank from available options.
Step 5: In case of multiple accounts, select the one you wish to register with BHIM.
Step 6: Set a UPI PIN.
Once these steps are covered, one can check UPI ID details from the profile section.

How to find a UPI ID?

Individuals can find their UPI ID in the profile of the handle they are using. Click here to check the steps to find UPI IDs in the most popular UPI apps.

Why can't I find my UPI Handle in Angel One's drop-down menu while applying for Jana Small Finance Bank IPO?

Usually, the UPI apps not approved by the NPCI are not available in Angel One's drop-down menu. So, as an alternative, one can use a UPI ID that is present on the NPCI list.

How long does it take to receive the UPI mandate request after placing an IPO order?

Typically, the UPI mandate request is shared on the respective app 15 to 20 minutes after bidding for Jana Small Finance Bank IPO. However, investors can experience some delay in receiving the request from their app.

How shall I approve the UPI mandate request?

You need to approve the mandate request in the UPI app itself. Click here to check the steps involved in the IPO mandate request approval process.

Can I submit more than one application for Jana Small Finance Bank IPO?

Typically, 1 application per PAN is recommended. Even if one applies for Jana Small Finance Bank IPO via different platforms with one PAN, the applications are likely to get rejected.

What charges do I have to pay when applying for Jana Small Finance Bank IPO?

When you apply for an IPO through Angel One, you do not have to pay any charges.

I am a non-residential Indian. Can I apply for IPO through the Angel One app?

You cannot subscribe to Jana Small Finance Bank through the Angel One app. However, an application can be made via the physical Application Supported By Blocked Amount or ASBA process with a bank.

What is the cut-off price, and how can I benefit by applying for Jana Small Finance Bank IPO at it?

It is the price at which IPO shares get issued. The cut-off price is fixed during allotment. Generally, investors bid at the cut-off price to increase their scope of allotment.

Can I apply for Jana Small Finance Bank IPO through a bank account that is not linked with Angel One?

Yes, you can apply for Jana Small Finance Bank IPO through a bank account that is not linked with us. In fact, you can use any Bank account given the account is held under your name.

Can I apply for Jana Small Finance Bank IPO using a current account?

Most banking institutions are not very keen on processing IPO applications made through a current account. Hence, it is recommended that you use a savings account instead. Check with your bank first to get more details on this.

Can I apply for Jana Small Finance Bank through a HUF's account?

You can apply for Jana Small Finance Bank IPO with HUF's account through the physical ASBA process. However, you will not be able to apply for the IPO through a HUF's account on the Angel One portal.

Can I apply for Jana Small Finance Bank IPO through my daughter's ( a minor) account?

You can apply for the IPO via the physical ASBA Process through a bank. However, note that Angel One does not allow minors to apply.

My Bank account was not debited even after I applied for IPO. Why is that so?

According to the physical ASBA process, banks block allotment money after you have applied for the IPO. Typically, the allotment money is debited once shares are allotted to you. If shares are not allotted, the amount is released/unblocked either before or on the UPI mandate expiry date.

Can the Jana Small Finance IPO bid be modified?

Yes, investors modify their IPO lot size and their UPI ID for the bid even after placing an order. Note that if you have approved the UPI mandate for the said order and then decide to modify it later, both the IPO bid amount and the amount for the original IPO will be blocked. In such a scenario, you will receive another UPI mandate request for the modified bid. But if you haven't approved the first UPI mandate request for the IPO, then zero will be blocked for the bid.

Can I delete/cancel/withdraw my Jana Small Finance Bank IPO application?

You can cancel/withdraw/delete your Jana Small Finance Bank application in these steps:
Step 1: Navigate to the ‘Investment Opportunities’ section on the Angel One app.
Step 2: Move to the 'IPOs and FPOs' section.
Step 3: Click the ‘Order Book’ button.
Step 4: Select the order you wish to cancel.
Step 5: Click on ‘Details’
Once you see the ‘Cancel’ option, select it to withdraw/delete/cancel the IPO application. Note that cancel/delete/withdraw application means the same thing.

How to check Jana Small Finance Bank IPO application status?

Follow these steps to check IPO application status:
Step 1: Navigate to 'investment Opportunities’.
Step 2: Choose ‘IPOs & FPOs’ option.
Step 3: Select the 'Order Book's option.
Subsequently, you will see the status of your IPO application.

Why was my Jana Small Finance Bank IPO application rejected?

Here are a few reasons as to why your Jana Small Finance Bank IPO application was rejected:
- For entering the wrong UPI ID/UPI PIN while approving the mandate request. - Bank A/c, Demat A/c, or the UPI ID was not mapped to your PAN.

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