Utkarsh Small Finance Bank sets IPO price band at Rs 23-25 per share

The equity shares offered are proposed to be listed on Bombay Stock Exchange.

Utkarsh Small Finance Bank has fixed the price band at Rs 23-25 per share for its initial public offering which will be opening for subscription next week. The lower-upper price band is 2.3-2.5 times the face value of equity shares.

The public issue will open for subscription on July 12 and the closing date would be July 14. The bidding date for the anchor book will be July 11.

The small finance bank is planning to raise Rs 500 crore via its maiden public issue, which comprises only a fresh issue portion. The offer included a reservation up to 1 percent of the issue size for its employees, which comes up to Rs 5 crore or 20 lakh shares.

The net proceeds from the issue will be utilised towards augmenting its Tier–1 capital base to meet future capital requirements, besides issue expenses.

Investors can bid for a minimum of 600 equity shares and in multiples of 600 shares thereafter, which means retail investors can apply for minimum shares worth Rs 15,000 per lot and their maximum investment would be Rs 1.95 lakh for 13 lots, at an upper price band, as they can exceed their investment beyond Rs 2 lakh in any IPO.

It has reserved up to 75 percent of the issue size for qualified institutional buyers, 15 percent for high networth individuals, and the remaining 10 percent for retail investors.

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Varanasi-headquartered Utkarsh Small Finance Bank recorded the third fastest gross loan portfolio growth between FY19 and FY23 among SFBs with a gross loan portfolio of more than Rs 6,000 crore as per CRISIL report.

After receiving in-principle approval from the Reserve Bank of India (RBI) in October 2015 to establish a small finance bank, promoter Utkarsh CoreInvest incorporated Utkarsh Small Finance Bank as a wholly-owned subsidiary in April 2016.

After obtaining the RBI licence in November 2016, Utkarsh CoreInvest has transferred its microfinance business, as a going concern to the small finance bank, which commenced its operations in January 2017.

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Utkarsh SFB with operations across 26 states and Union Territories with 830 banking outlets and 15,424 employees as of March 2023 had a 3.59 million customer base majorly located in rural and semi-urban areas primarily in Bihar and Uttar Pradesh, which constituted 30.88 percent and 25.98 percent of its total gross loan portfolio respectively.

To focus on further strengthening the business in newer geographies, the bank tied up with 13 business correspondents and 321 direct selling agents.

This would be the fifth small finance bank to be available for trading on the bourses after Ujjivan Small Finance Bank, AU Small Finance Bank, Equitas Small Finance Bank, and Suryoday Small Finance Bank.

ICICI Securities and Kotak Mahindra Capital Company are the merchant bankers for the issue, while Kfin Technologies is the registrar.