The 750 crore IPO of Ujjivan Small Finance Bank will open on December 2. The share sale will close on December 4. Ujjivan Small Finance Bank, a mass market focused small finance bank and promoted by Ujjivan Financial Services Limited, has set a price-band in the range of 36-37. Ujjivan Small Finance Bank IPO comprises fresh issue of equity shares aggregating up to 750 crore and a reservation of equity shares aggregating up to around 75 crore for subscription by eligible shareholders of Ujjivan Financial Services.

Ujjivan Small Finance Bank IPO Lot size: Bids can be made for a minimum 400 equity shares and in multiples of 400 shares thereafter.

Allotment date and listing date (tentative): The share allotment is likely to be finalised on December 9, 2019 and listing likely on December 12, 2019.

Karvy Fintech Private Limited is the registrar of the Ujjivan Small Finance Bank issue while Kotak Mahindra Capital Company Ltd, IIFL Securities Ltd and JM Financial Ltd are the book running lead managers to the issue.

Post IPO, the promoters holding will come down from 94% to 83%. The proceeds from the IPO will be utilised for augmenting its Tier-1 capital base to meet its future capital requirements and towards meeting the expenses in relation to the issue.

The shareholders of Ujjivan Financial Services will get shares at a discount of 2 per share to the final issue price. Ujjivan Financial Services, the promoter of Ujjivan Small Finance Bank, had commenced operations as an NBFC in 2005.

Ujjivan Small Finance Bank had earlier this month raised 250 crore in a pre-initial public offering (IPO) round, led by India Infoline (IIFL) group’s funds, a private equity fund of Avendus Capital and Akash Bhanshali of Enam Group.

As of June 30, 2019, Ujjivan Small Finance Bank served 4.72 million customers and had 474 banking outlets spread across 24 states and union territories.

The portfolio of products and services offered by Ujjivan Small Finance Bank, which had started operations in February 1, 2017, include loans to micro-banking customers that include group loans and individual loans, agriculture and allied loans, MSE loans, affordable housing loans, financial institutions group loans, personal loans, and vehicle loans.

In addition, its also provides non-credit offerings comprising ATM-cum-debit cards, Aadhaar enrolment services and distributes third party insurance products.

On the liability side, Ujjivan Small Finance Bank offers savings accounts, current accounts and a variety of deposit accounts.

The gross advances of Ujjivan Small Finance Bank have grown from 6,383.9 crore as of March 31, 2017 to 11,048.5 crore as of March 31, 2019. Its deposit base has grown from 206.4 crore as of March 31, 2017 to 7,379.4 crore as of March 31, 2019.

As of June 30, 2019, its percentage of gross NPAs to gross advances was 0.84% while net NPAs to net advances was 0.26%. It reported a profit of 199.2 crore.

Geojit Financial Services has a subscribe rating on the issue. "The experience of Ujjivan Financial Services as an erstwhile microfinance institution, coupled with the ability to address mass market customers will further aid Ujjivan Small Finance Bank to be among the leading SFBs in India. At the upper price band of 37, Ujjivan Small Finance Bank is available at P/BV of 2.5x FY19, which is at a significant discount to its peers," the brokerage said in a note.

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