Kerala based, ESAF Small Finance Bank on Monday filed its Draft Red Herring Prospectus (DRHP) with markets regulator Securities and Exchange Board of India for an IPO. As per the DRHP filed the aggregate issue size is up to ₹997.78 crs; comprising of a fresh Issue component of up to ₹ 800 crs and an Offer for Sale up to ₹ 197.78 crs by promoter and other selling shareholders i.e PNB Metlife India Insurance Company, Bajaj Allianz Life Insurance Ltd, PI Ventures LLP, and John Chakola.
The net proceeds from the fresh issue will be used to augment the bank's Tier 1 capital (primarily loans, advances and investment portfolio) to meet future capital requirements.
The company may consider a Pre-IPO placement of up to ₹ 300 crs subject to counsel from the lead managers.
As per the CRISIL report, ESAF, is one of the leading small finance banks in terms of yield on advances, AUM growth rate and share of retail deposits. It currently operates across 21 states and two union territories with 550 Branches, 421 customer service centres (which are operated by our business correspondents), 12 business correspondents, 158 banking agents and 327 ATMs and serves over 4.68 million customers.
The bank that follows a social business strategy seeking an impact across people, planet and prosperity, has asset products comprising of micro loans, retail loans, MSME and corporate loans and agricultural loans.
As of March 2021, its gross advances stood at Rs 8,415 crs compared with Rs 6,606.51 crs a year ago and total deposits were at Rs 8,999.43 crs against Rs 7028.38 crs.
Additionally, the DRHP states that the bank will continue to focus on its rural and semi urban franchisees and increase deposits across NRIs and CASA. As on date, it stands to have the highest share of retail deposits as a percentage to the total deposits when compared to the other small finance banks.
Investment Bankers appointed to the issue are Axis Capital Ltd, Edelweiss Financial Services Ltd, ICICI Securities Ltd and IIFL Securities Ltd.