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.
per equity share
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Listing at NSE, BSE
Jana Small Finance Bank IPO Important Dates
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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 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:
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.
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
- 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.
- 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.
- 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.
- 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.
- 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
|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%|
|Ujjivan Small Finance Bank||1.49%|
|South India Bank||1.00%|
Jana Small Finance Bank IPO FAQs
How can I apply for Jana Small Finance Bank IPO through Angel One App?
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?
Can I apply for Jana Small Finance Bank IPO if I don’t have a UPI ID?
How to create a UPI ID?
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?
Why can't I find my UPI Handle in Angel One's drop-down menu while applying for Jana Small Finance Bank IPO?
How long does it take to receive the UPI mandate request after placing an IPO order?
How shall I approve the UPI mandate request?
Can I submit more than one application for Jana Small Finance Bank IPO?
What charges do I have to pay when applying for Jana Small Finance Bank IPO?
I am a non-residential Indian. Can I apply for IPO through the Angel One app?
What is the cut-off price, and how can I benefit by applying for Jana Small Finance Bank IPO at it?
Can I apply for Jana Small Finance Bank IPO through a bank account that is not linked with Angel One?
Can I apply for Jana Small Finance Bank IPO using a current account?
Can I apply for Jana Small Finance Bank through a HUF's account?
Can I apply for Jana Small Finance Bank IPO through my daughter's ( a minor) account?
My Bank account was not debited even after I applied for IPO. Why is that so?
Can the Jana Small Finance IPO bid be modified?
Can I delete/cancel/withdraw my Jana Small Finance Bank IPO application?
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?
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?
- 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.