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Varanasi-headquartered Utkarsh Small Finance Bank has refiled preliminary papers with markets regulator Sebi and reduced its initial public offering (IPO) size to 500 crore. Earlier, the bank was looking to raise 1,350 crore through an initial share sale.

According to a PTI report, the company filed the paper afresh as Sebi's one-year approval given to the small finance bank (SFB) to launch IPO expired in June.

The Securities and Exchange Board of India's regulations say a firm gets one year to hit the primary market after receiving approval from the market regulator. In case a firm fails to do so during this time, it has to refile the prospectus with the Sebi, seeking fresh clearance.

SFB's 500 crore IPO

As per a fresh draft red herring prospectus (DRHP) filed yesterday, the SFB's 500 crore IPO is a complete fresh issue of shares and the entire proceeds will go to the bank.

The lender may consider the issue of securities aggregating up to 100 crore in a pre-IPO placement round. If such placement is undertaken, the fresh issue size will be reduced.

Proceeds from the fresh issue will be utilised to augment the lender's tier 1 capital base to meet future capital requirements.

Last year in March, the SFB had filed draft papers with Sebi to raise 1,350 crore through the IPO. It was seeking the issuance of fresh shares amounting to 750 crore and an offer for sale of up to 600 crore. 

The lender had received Sebi's go-ahead to float the IPO in June last year but didn't launch the initial share sale.

ICICI Securities and Kotak Mahindra Capital Company are the book-running lead managers to the issue.

Small finance banks come under a specific segment of banking whose objective is to provide basic banking activities to unserved regions and underserved sectors like small business units, small and marginal farmers, micro and small industries and so on.

Other listed firms in the small finance segment include Equitas Small Finance Bank, Ujjivan Small Finance Bank, CreditAccess Grameen, Spandana Sphoorty Financial, Bandhan Bank and AU Small Finance Bank.

Utkarsh SFB earns net profit of 48.4 cr in March qtr

Meanwhile, Utkarsh Small Finance Bank has earned a net profit of 48.4 crore in the March quarter after making a 24.6 crore loss in the preceding quarter.

The bank's advances rose by 24.5% year-on-year to 10228 crore at the end of March. Deposits grew by 34.2% to 10074 crore.

The lender's gross non-performing assets ratio was at 6.10% at the end of the reporting period. Net NPA was at 2.31%. Its provision coverage ratio was 63.6%.

As of 31 March this year, its operations are spread across 22 states and Union Territories with 686 banking outlets and 12,617 staff, serving 31.4 lakh customers majorly located in rural and semi-urban areas, primarily in Bihar, Uttar Pradesh and Jharkhand.

With agency inputs

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