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UTKARSH SMALL FINANCE BANK LTD IPO

IPO Details

-
-
600 shares
-
₹ 23 – 25
₹ Up to 500 crores

Issue timeline

  • -
  • 19-Jul-2023
  • 20-Jul-2023
  • 21-Jul-2023
  • 24-Jul-2023

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

About Company

- An Small Finance Bank in India and recorded the second fastest AUM growth between Fiscal 2019 and Fiscal 2022 among
SFBs with AUM of more than ₹ 50 billion.(Source: CRISIL Report)
- Utkarsh CoreInvest Limited, the promoter of the company has Commenced its operations as a NBFC in Fiscal 2010, later converted to a NBFC – MFI and was focused on providing microfinance to unserved and underserved segments and in particular in the states of Uttar Pradesh and Bihar.

Strengths & Risks

Strengths (3)

Sound understanding of microfinance segment and presence in rural and semi-urban areas
Utkarsh CoreInvest Limited has a history of serving customers in the microfinance segment with a particular focus on financial inclusion for unserved and underserved customer segments in rural/ semi-urban areas of Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh and Uttarakhand.(Source: Company DRHP)

Risks (2)

The company is currently significantly dependent on microbanking segment, and any adverse developments in this segment could adversely affect business.
The company's financial performance significantly depends on microbanking segment, which in turn depends on various factors, including the ability of borrowers to repay their loan, changes in regulations and policies by the governments.These and other factors could lead to an increase in impairment losses and adversely affect business and results of operations.(Source: Company DRHP)

 

  • Sound understanding of microfinance segment and presence in rural and semi-urban areas
    Utkarsh CoreInvest Limited has a history of serving customers in the microfinance segment with a particular focus on financial inclusion for unserved and underserved customer segments in rural/ semi-urban areas of Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh and Uttarakhand.(Source: Company DRHP)

  • Growing deposits with focus on retail deposits
    The company offer a variety of demand and time deposit products along with other services through which customers can address their savings and transactional needs.The product suite includes a range of deposit products including saving accounts, salary accounts, current accounts, recurring and fixed deposits (with callable and non-callable options) and locker facilities(Source: Company DRHP)

  • Diversified distribution network with significant cross-selling opportunities
    As of March 31, 2022,the company has 686 Banking Outlets across 22 States and Union Territories covering 224 districts in India of which 434 Banking Outlets were located in rural and semi-urban areas (combined).(Source: Company DRHP)

  • The company is currently significantly dependent on microbanking segment, and any adverse developments in this segment could adversely affect business.
    The company's financial performance significantly depends on microbanking segment, which in turn depends on various factors, including the ability of borrowers to repay their loan, changes in regulations and policies by the governments.These and other factors could lead to an increase in impairment losses and adversely affect business and results of operations.(Source: Company DRHP)

     

  • Any volatility in interest rates or inability to manage interest rate risk could adversely affect Net Interest Margins.
    The company's results of operations are substantially dependent on Net Interest Income.Any change or volatility in interest rates would affect interest expense on interest-bearing liabilities and interest income from interest-bearing assets, and therefore affect Net Interest Income and Net Interest Margins.(Source: Company DRHP)

Financials

Net Worth
Total Income
Total Borrowings
Profit/Loss after tax
Basic Earning per Share (EPS)

Industry Overview

- SFBs continue to diversify their portfolio beyond microfinance business : After the conversion of NBFC-MFIs to SFBs, the focus
is now on diversifying the product portfolio. As a result, the share of their MFI portfolio in total advances reduced
to 36% as of Fiscal 2022 from 90-95% as of Fiscal 2016.
- SFB deposits to grow faster than private and public-sector banks :  SFBs have a significant growth potential as most of them were functioning as NBFCs/MFIs previously. Immediately after commencement of their operation, all SFBs focussed on increasing their deposit base. Their overall deposit base doubled to around ₹ 375 billion as of Fiscal 2019 and ₹ 1,211 billion in Fiscal 2022 (Source: Company DRHP)

 

vishal-mega-mart IPO

Utkarsh Small Finance Bank Ltd IPO

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600 shares

Subscription Status

Shareholder -
Qualified Institutional Buyers -
Non-Institutional Investor -
Retail Individual Investor -
Employee -
Total -

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*The financials mentioned above are sourced from DRHP/ RHP documents.

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