SBFC Finance IPO worth ₹1,025 crore to open on August 3; details here

SBFC Finance IPO: SBFC Finance Ltd initial public offering (IPO) opens for subscription on Thursday, August 3, and closes on Monday, August 7. The allocation to anchor investors for SBFC Finance IPO is scheduled to take place on Tuesday, August 2. The price band for SBFC Finance IPO is yet to be announced by the company.

SBFC Finance IPO comprises of fresh issuance of equity shares worth ₹600 crore and an offer for sale (OFS) of ₹425 crore, according to the Red Herring Prospectus (RHP). The total offer size of SBFC Finance IPO now is ₹1,025 crore.

In March, SBFC Finance refiled its IPO papers with capital market regulator Securities and Exchange Board of India (SEBI), where they reduced the IPO size to ₹ ₹1,200 crore from ₹1,600 crore earlier.

Selling shareholders under the OFS include Arpwood Partners Investment Advisors, will be offering equity shares for ₹306 crore; Arpwood Capital; and Eight45 Services, would sell shares for up to ₹75 and ₹43 crore, respectively.

In accordance with the RHP, SBFC Finance intends to use the net proceeds to meet future capital requirements that are anticipated to result from the expansion of their company's operations and assets, including but not limited to, onward lending under company's lending verticals, namely, MSME loans and loans against gold, ensuring compliance with relevant regulatory requirements, payments of operating expenses, and funding growth opportunities.

"As of March 31, 2023 our Company’s Capital to Risk Weighted Assets Ratio (CRAR) was ₹14,135.76 million (equivalent to 31.90%) of which the Tier I capital was ₹14,049.52 million (equivalent to 31.71%) and our Tier II capital was ₹86.24 million (equivalent to 0.19%). We anticipate that the Net Proceeds will be sufficient to satisfy our company’s Tier- I capital requirements," said the company in its RHP.

The size of the fresh issue has also been lowered as a result of the company's completion of a private placement of up to ₹150 crore, which was done in conjunction with the promoter-selling shareholders and the book-running lead managers.

The book-running lead managers (BRLM) for the offer are ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company, while KFin Technologies is the registrar.

SBFC IPO date: SBFC Finance IPO's basis of allotment of shares will be finalised on Thursday, August 10 and the company will initiate refunds on Friday, August 11, while the shares will be credited to the demat account of allottees on Monday, 14 August. SBFC Finance IPO shares are likely to be listed on BSE and NSE on Wednesday, August 16.

The firm specialises in providing loans to entrepreneurs, self-employed people, small business owners, and salaried people. The company generated sales of ₹525 for the nine months ending in December. During that time, the company made profit of ₹107.

It has 137 branches spread throughout 105 locations, and as of December 2022, it had 94,997 customers, up from 40,432 in FY20.

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