ESAF Small Finance Bank IPO opens today: GMP, issue details, review, here are 10 key things to know
- ESAF Small Finance Bank IPO opens for subscription today. The bank focuses on providing credit to customers in rural and semi-urban areas.
ESAF Small Finance Bank IPO opens for subscription on Friday, November 3. ESAF is a small finance bank focuses primarily on providing credit to customers who reside in rural and semi-urban areas. The bank offers retail loans, MSME loans, microloans, loans to financial institutions, and agricultural loans.
The small finance bank's main offerings are deposits (liability products) and advances (asset products), according to the Red Herring Prospectus (RHP). The advances are divided into the following categories: (a) Micro Loans, which include Microfinance Loans and Other Micro Loans; (b) Retail Loans, which include Car, Mortgage, Gold, and Personal Loans; (c) MSME Loans; (d) Loans to Financial Institutions; and (e) Agricultural Loans.
As of June 30, 2023, 71.71% of banking outlets were situated in rural and semi-urban areas, and gross advances to customers in these areas amounted for 62.97% of their total gross advances.
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As of June 30, 2023, ESAF Small Finance Bank IPO served 7.15 million customers through its network of 700 banking locations, 767 customer care centres, 22 business correspondents, 2,116 banking agents, 525 business facilitators, and 559 ATMs scattered over 21 states and two union territories. ESAF Small Finance Bank's activities are spread throughout India, with a concentration of the business in South India, specifically in the states of Tamil Nadu and Kerala.
The bank's FY23 net profit more than doubled from ₹54.73 crore to ₹302.3 crore. With a 60% YoY increase, the bank's net interest income (NII) reached ₹1,836.3 crore in FY23.
With the highest compound annual growth rate (CAGR) among its peers, ESAF Small Finance Bank's asset under management (AUM) increased from ₹8,425.93 crore on March 31, 2021 to ₹16,331.26 crore on March 31, 2023.
As per the RHP, the company's comparable listed peer are Suryoday Small Finance Bank Ltd (with P/E of 22.39), Credit Access Grameen Ltd (with P/E of 26.81), Spandana Sphoorty Financial Ltd (with P/E of 471.38), Bandhan Bank Ltd (with P/E of 16.55), Ujjivan Small Finance Bank Ltd (with P/E of 9.81), and Equitas Small Finance Bank Ltd (with P/E of 21.51).
Here are the 10 key things to know about ESAF Small Finance Bank IPO:
ESAF Small Finance Bank IPO date: ESAF Small Finance Bank IPO opens for subscription on Friday, November 3, and closes on Tuesday, November 7.
ESAF Small Finance Bank IPO price: ESAF Small Finance Bank IPO price band has been fixed in the range of ₹57 to ₹60 per equity share of face value of ₹10.
ESAF Small Finance Bank IPO anchor investors: The anchor investor allocation is scheduled to take place today (Thursday, November 2).
ESAF Small Finance Bank IPO lot size: The IPO lot size is 250 equity shares and in multiples of 250 equity shares thereafter.
ESAF Small Finance Bank IPO details: The IPO comprises a fresh issuance of equity shares worth ₹390.7 crore by the company, and an offer-for-sale (OFS) of equity shares worth ₹72.3 crore by three shareholders.
In the OFS, promoter ESAF Financial Holdings will sell shares worth ₹49.26 crore, while PNB MetLife India Insurance Company and Bajaj Allianz Life Insurance Company will offload shares worth ₹23.04 crore.
ESAF Small Finance Bank IPO objectives: The bank proposes to utilise the net proceeds from the fresh issue to augment its Tier – I capital base to meet the future capital requirements.
ESAF Small Finance Bank IPO reservation: ESAF Small Finance Bank IPO has reserved not more than 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15% for Non Institutional Investors (NII), and not less than 35% of the offer is reserved for Retail Investors. A discount of ₹5 per equity share is being offered to eligible employees bidding in the employee reserve portion.
Lead Manager and Registrar of ESAF Small Finance Bank IPO: The book-running lead managers for ESAF Small Finance Bank IPO are ICICI Securities, DAM Capital Advisors and Nuvama Wealth Management, while Link Intime India is the IPO registrar.
ESAF Small Finance Bank IPO GMP today: ESAF Small Finance Bank IPO GMP today or grey market premium is +9, similar to the previous two session. This indicates ESAF Small Finance Bank share price were trading at a premium of ₹9 in the grey market on Thursday, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of ESAF Small Finance Bank share price was indicated at ₹69 apiece, which is 15% higher than the IPO price of ₹60.
ESAF Small Finance Bank IPO review
“ESAF Small Finance Bank has posted growth in its top and bottom lines and continues to enjoy its south centric fancy. Based on annualised FY24 earnings, the issue appears attractively priced. With this equity float, the company will be free for expansion of branches and relaxed regulations. Investors may consider parking of funds for the medium to long-term reward,” said Dilip Davda, the contributing editor at Chittorgarh.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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