Ujjivan Small Finance Bank Ltd IPO Review, Ujjivan IPO review

Ujjivan Small Finance Bank Limited IPO Review

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We have been discussing about different IPOs recently. And this time, we bring for you one more upcoming IPO: Ujjivan Small Finance Bank Limited IPO.

Before digging into the IPO details, let’s gather some useful and important information about the company and the services it offers.

Ujjivan Small Finance Bank Limited: Company Overview

Incorporated as Ujjivan Small Finance Bank Limited on July 4, 2016, the bank promoter Ujjivan Financial Services Ltd (USFL) received final approval by RBI to carry small finance bank(SFB) business in India on November 11, 2016. It started its business with effect from February 1, 2017.

Spread across 24 states and union territories as of March 31, 2019, Ujjivan Small Finance Bank Limited serves 4.72 million customers and operates 474 banking outlets that included 120 banking outlets in Unbanked Rural Centres. In Fiscal 2019 alone, 287 banking outlets were operationalized. As of June 30, 2019, the bank has a network of 387 ATMs , two 24/7 phone banking units in Bengaluru and Pune and a mobile banking application, internet banking facility for individual as well as corporate customers.

Ujjivan Small Finance Bank Limited: Services Offered

The bank portfolio  has numerous asset and liability products and services.

Their asset products comprise of:

  • Loans to micro banking customers including group loans and individual loans
  • Agriculture and allied loans
  • MSE loans
  • Housing loans
  • Financial institutions group loans
  • Personal loans
  • Vehicle loans

On the liability side, the bank offers:

In addition, they also provide non-credit offerings comprising ATM-cum-debit cards, Aadhaar enrolment services, distribute third party insurance products and point of sales (POS) terminals.

Ujjivan Small Finance Bank Limited: Key Strengths to Know

  1. Microfinance industry is expected to grow at CAGR of a 25% over next three fiscals.
  2. Focus on financially un-served and underserved segments.
  3. Customer centric organization with multiple delivery channel.
  4. Robust risk management framework.
  5. A Pan-India presence.

Also, have a look at CAMS IPO Review & Details

Key Risks of Ujjivan Small Finance Bank Limited

  1. Small Finance Bank (SFB) model is relatively new to India.
  2. Ujjivan Small Finance Bank Limited has limited operating history as a SFB.
  3. Promoter stake will be reduced to 40%, 30% & 26% of the paid up equity share capital in 5th, 10th & 12th year of commencement respectively.
  4. Handling substantial cash, makes the bank susceptible to risks like fraud, theft etc.

Ujjivan Small Finance Bank Limited: Competitive Strengths

  1. Ujjivan Small Finance Bank (USFB) has the lowest gross non-performing assets levels among all SFBs.
  2. It has the second highest provision coverage ratio in comparison to its peers.
  3. USFB has the most diversified portfolio among SFBs.
  4. UFSB has the fourth highest returns on assets as compared to all Small Finance Banks.

Ujjivan Small Finance Bank Ltd Team

Promoters

Ujjivan Financial Services Limited (USFL), a listed company whose equity shares are listed on the Stock Exchanges is the promoter of Ujjivan Small Finance Bank Limited.

Directors

As on date,  USFB board comprises of 12 Directors including one Executive Director, two Non-Executive Directors, eight Independent Directors and one Nominee Director of SIDBI.

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Incoming Director

Nitin Chugh has been appointed as the Managing Director and Chief Executive Officer of the Bank in the AGM held on July 12, 2019 and shall assume office as Managing Director and Chief Executive Officer with effect from December 1, 2019.

Ujjivan Small Finance Bank Ltd IPO Review, Ujjivan IPO review

Ujjivan Small Finance Bank Ltd: Summary of Assets and Liabilities (in Rs. Millions)

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Ujjivan Small Finance Bank Ltd: Summary of Profit and Loss (in Rs. Millions)

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Ujjivan Small Finance Bank Ltd: Summary of Cash Flows (in Rs. Millions)

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Ujjivan Small Finance Bank Ltd IPO Objective

  1. For augmentation of our Bank’s Tier – 1 capital base

Ujjivan Small Finance Bank Ltd. Pre-IPO round

Ujjivan SFB Pre-IPO round closed on 13-Nov-2019. This was led by IIFL groups, Avendus Capital, and ENAM Group and raised about Rs 250 crore through the Pre-IPO round.  Ujjivan SFB offered 71.43 million shares at Rs 35 per equity shares.  India Infoline Finance Limited (IIFL) bought 50 percent of bank shares investing up to Rs 136 crore while Avendus and ENAM group invested Rs 32.5 crore and Rs 25 crore respectively. The fundraising resulted in dilution of 4.75% stake and values the bank at Rs 5,290 crore.

Ujjivan Small Finance Bank IPO Details

Ujjivan Small Finance Bank IPO to open for subscription 2nd December 2019 and closes on 4th December 2019 with a price band of Rs.36-37 per share. It is aimed to raise around Rs.750 crore with this fresh IPO issue.

Here are some other useful details on the Ujjivan SFB IPO:

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Ujjivan Small Finance Bank IPO Dates (Tentative)

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Ujjivan Small Finance Bank IPO Lot Size (Retail)

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