Capital Small Finance Bank Limited Set to Launch IPO on February 7

Capital Small Finance Bank Limited is poised to launch its Initial Public Offering (IPO), marking a significant milestone in its journey. Established in 2015, Capital SFB earned the distinction of being the first non-NBFC microfinance entity to secure the Small Finance Bank (SFB) license, underscoring its commitment to financial inclusion and rural development.

Overview:

Headquartered in Jalandhar, Punjab, Capital Small Finance Bank has strategically expanded its footprint across northern states such as Punjab, Haryana, Rajasthan, Delhi, Himachal Pradesh, and UT Chandigarh. With a branch-based operating model, the bank focuses on catering to the middle-income customer segments, with an annual income ranging from ₹0.4-5 million. Through a blend of product offerings, robust customer service, physical branches, and digital channels, the bank aims to become the primary banking partner for its customers.

Operational Highlights:

As of June 30, 2023, Capital Small Finance Bank boasted 172 branches and 174 ATMs spread across five states and one union territory, predominantly in rural and semi-urban areas. This extensive network covers 24 districts and serves approximately 75.90% of total customers, both in terms of credit and deposits. Notably, the bank’s loan book remains highly secured, with 99.82% and 99.84% of loans secured by immovable properties as of March 31 and June 30, 2023, respectively.

 

IPO Details:

 

  • Opening Date: February 7, 2024
  • Closing Date: February 9, 2024
  • Issue Type: Book Built Issue IPO
  • Issue Size: 1,11,76,714 Shares Worth ₹523.07 Crore
  • Fresh Issue: 96,15,385 Shares Worth ₹450 Crore
  • Offer For Sale: 15,61,329 Shares Worth ₹73.07 Crore
  • Face Value: ₹10 per equity share
  • IPO Price: ₹445 – ₹468
  • Market Lot: 32 Shares
  • Listing: BSE, NSE

 

Competitive Strengths:

 

  • Retail-Focused Liability Franchise with High Share of CASA
  • Secured and Diversified Advances Portfolio
  • Streamlined Credit Assessment Processes and Risk Management Practices
  • Customer-Centric Approach and Understanding of Target Customers
  • Consistent Growth Track Record with Improving Operational and Profitability Metrics
  • Professional and Experienced Leadership Team

 

Financial Snapshot:

 

Particulars 31 March 2021 31 March 2022 31 March 2023
Total Revenue 557.27 632.40 725.48
Total Expense 516.48 569.83 631.88
Profit After Tax 40.78 62.57 93.60
Total Borrowing 616.72 498.43 721.38

Key Performance Indicators:

KPI Values
ROE 16.45%
Debt/Equity 0.95
RoNW 15.33%

 

Objectives of the IPO:

The net proceeds from the Fresh Issue will be utilized to augment the bank’s Tier-I capital base, meeting future capital requirements, and covering expenses related to the offering. Additionally, the bank anticipates reaping the benefits of listing its Equity Shares on the Stock Exchanges.

 

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