The initial public offer (IPO) of Capital Small Finance Bank was subscribed 4 times on the third day of the bidding process. All the categories reserved for the Rs 523-cr IPO were fully subscribed.
The IPO is a fresh equity issue of Rs 450 crore and an offer for sale (OFS) of 15.61 lakh shares. Under the OFS, Oman India Investment Fund, Amicus among others will offload shares.
Capital Small Finance Bank commenced operations as India’s first small finance bank in 2016. They offer a range of banking products on the asset and liability side. It has 42% of the branches in rural areas, 34% branches in semi-urban areas and 24% in urban areas, as of September 2023.
The bank has a diversified portfolio with sizable books in multiple asset classes with proportion of secured lending of 99.85% as on September 2023.
Since FY21, its loans, with a ticket size of up to Rs 25 lakh, increased from 62.88% of its total loan book to 67.80% in FY23.
In the unlisted market, Capital Small Finance Bank shares are trading at a premium of Rs 40.
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The lender has priced the IPO in the range of Rs 445-468 per share and investors can bid for 32 shares in one lot and in multiples thereafter.
Capital Small Finance Bank IPO review
Analysts gave a thumbs up to the IPO from a long-term perspective as the company has good credit assessment processes, and risk management practices, which enables to maintain good asset quality and low delinquencies
Other details
About 50% of the offer is reserved for qualified institutional buyers, 35% for retail investors and the rest 15% for non-institutional investors.
In the period ended September 2023, the company’s revenue from operations increased 21% to Rs 415 crore and the net profit rose 31% to Rs 54.3 crore.
Nuvama, Equirus Capital and DAM Capital are the book-running lead managers to the issue and Link Intime India is the registrar.
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