Capital Small Finance Bank gets green signal from SEBI to launch its proposed IPO; key highlights here

Capital Small Finance has received market regulator Sebi's approval for its proposed initial public offering (IPO) today (January 16). The company filed its draft prospectus on September 28 last year. The price band and IPOs' important dates will be announced in due course.

The IPO consists of a fresh issue of ₹450 crore and an offer for sale of up to 2,412,685 equity shares. For the IPO, Nuvama Wealth Management, DAM Capital Advisors, and Equirus Capital Private are the book-running lead managers.

Also Read: LIC stock touches ₹900 mark for first time since listing; mcap jumps ₹1.82 lakh crore in less than 3 months

The bank commenced operations as India’s first small finance bank in 2016 and is among the leading SFBs in India in terms of cost of funds, retail deposits, and CASA deposits for fiscal 2023. It has the highest proportion of retail deposits at 97.90%, along with a CASA ratio of 41.88%, resulting in the lowest cost of funds of 5.12% among the SFBs as of fiscal 2023, according to the company's DRHP report.

Its loan portfolio comprises agricultural, MSME and trading, mortgage lending, retail loans, and loans to large corporates. As a small finance bank, it focuses primarily on agricultural, MSME, trading, retail, and mortgage loans, which constitute the majority of its loans.

Also Read: New Swan IPO allotment to be out soon; here's how to check allotment status

The bank primarily focuses on middle-income customer segments, such as customers with an average annual income of ₹0.4 million to ₹5 million.

Its disbursements increased from ₹13,450.77 million for fiscal 2021 to ₹19,906.71 million in FY23. Further, its advances as of March 31, 2023, 2022, and 2021 and the three months ended June 30, 2023, were ₹55,072.67 million, ₹46,887.03 million, ₹37,629.87 million, and ₹55,193.27 million, respectively, which grew at a CAGR of 20.98% between Fiscal 2021 and Fiscal 2023.

As of June 30, 2023, the bank had 172 branches, of which 72 were rural branches, 59 were semi-urban branches, 30 were urban branches, and 11 were metro branches, the DRHP report showed.

Also Read: Medi Assist Healthcare IPO: 10 key things to know from RHP

The bank operates within a highly competitive landscape, contending with significant competition from other small finance banks, scheduled commercial banks, and NBFCs. Among its listed peers are AU Small Finance Bank, Equitas SFB, Ujjivan SFB, Jana SFB, ESAF SFB and Utkarsh SFB.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.