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:
- Savings accounts
- Current accounts
- A variety of deposit accounts
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
- Microfinance industry is expected to grow at CAGR of a 25% over next three fiscals.
- Focus on financially un-served and underserved segments.
- Customer centric organization with multiple delivery channel.
- Robust risk management framework.
- A Pan-India presence.
Also, have a look at CAMS IPO Review & Details
Key Risks of Ujjivan Small Finance Bank Limited
- Small Finance Bank (SFB) model is relatively new to India.
- Ujjivan Small Finance Bank Limited has limited operating history as a SFB.
- Promoter stake will be reduced to 40%, 30% & 26% of the paid up equity share capital in 5th, 10th & 12th year of commencement respectively.
- Handling substantial cash, makes the bank susceptible to risks like fraud, theft etc.
Ujjivan Small Finance Bank Limited: Competitive Strengths
- Ujjivan Small Finance Bank (USFB) has the lowest gross non-performing assets levels among all SFBs.
- It has the second highest provision coverage ratio in comparison to its peers.
- USFB has the most diversified portfolio among SFBs.
- 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.
| S.No. | Name | Designation |
|---|---|---|
| 1 | Sunil Vinayak Patel | Part-Time Chairman and Independent Director |
| 2 | Samit Kumar Ghosh | Managing Director and Chief Executive Officer |
| 3 | Jayanta Kumar Basu | Non-Executive Director |
| 4 | Vandana Viswanathan | Non-Executive Director |
| 5 | Chitra Kartik Alai | Non-Executive Nominee Director |
| 6 | Sachin Bansal | Independent Director |
| 7 | Luis Miranda | Independent Director |
| 8 | Biswamohan Mahapatra | Independent Director |
| 9 | Prabal Kumar Sen | Independent Director |
| 10 | Nandlal Laxminarayan Sarda | Independent Director |
| 11 | Mona Kachhwaha | Independent Director |
| 12 | Mahadev Lakshminarayanan | Independent Director |
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: Summary of Assets and Liabilities (in Rs. Millions)
| Particulars | Reference | As on 31.03.2019 | As on 31.03.2018 | As on 31.03.2017 |
|---|---|---|---|---|
| Capital and Liabilities | ||||
| Capital | 1a | 16,400.37 | 16,400.37 | 16,400.37 |
| Reserves and Surplus | 1b | 1,795.94 | 68.98 | 0.35 |
| Deposits | 1c | 73,794.40 | 37,725.18 | 2,064.05 |
| Borrowings | 1d | 41,660.90 | 38,528.45 | 62,914.04 |
| Other Liabilities and Provisions | 1e | 3,770.54 | 2,005.75 | 2,980.24 |
| Total Capital and Liabilities | 1g=1a+1b+1c+1d+1e | 137,422.15 | 94,728.73 | 84,359.05 |
| Assets | ||||
| Cash and Balances with Reserve Bank of India | 2a | 4,464.64 | 2,496.34 | 2609.29 |
| Balances with Banks and Money at Call and Short Notice | 2b | 6,479.96 | 2,452.01 | 5,018.92 |
| Investments | 2c | 15,266.22 | 12,324.79 | 14,466.77 |
| Advances | 2d | 105,524.55 | 73,362.11 | 58,610.45 |
| Fixed Assets | 2e | 2,844.50 | 1,983.45 | 1,397.69 |
| Other Assets | 2f | 2,842.28 | 2,110.03 | 2,255.93 |
| Total Assets | 2g=2a+2b+2c+2d+2e+2f | 137,422.15 | 94,728.73 | 84,359.05 |
| Contingent Liabilities | 3a | 308.53 | 195.09 | 283.36 |
Ujjivan Small Finance Bank Ltd: Summary of Profit and Loss (in Rs. Millions)
| Particulars | Reference | As on 31.03.2019 | As on 31.03.2018 | As on 31.03.2017 |
|---|---|---|---|---|
| Income | ||||
| Interest Earned | 1a | 18,316.11 | 14,678.75 | 2,170.10 |
| Other Income | 1b | 2,059.64 | 1,114.80 | 68.64 |
| Total Income(top-line) | 1c=1a+1b | 20,375.75 | 15,793.55 | 2,238.74 |
| Expenses | ||||
| Total Expenses | 2a | 18,383.57 | 15,724.92 | 2,238.39 |
| Profit/ Loss | ||||
| Net Profit/ (Loss) for the period/year | 3a | 1,992.18 | 68.63 | 0.35 |
| Profit/ (Loss) brought forward | 3b | 51.73 | 0.26 | 0.00 |
| Total Profit/ Loss (bottom -line) | 3c=3a+3b | 2,043.91 | 68.89 | 0.35 |
| Earnings Per Share | ||||
| Basic in Rs.(Face value of Rs.10 each) | 3a | 1.20 | 0.05 | 0.00 |
| Diluted in Rs.(Face value of Rs.10 each) | 3b | 1.20 | 0.05 | 0.00 |
Ujjivan Small Finance Bank Ltd: Summary of Cash Flows (in Rs. Millions)
| Particulars | Reference | As on 31.03.2019 | As on 31.03.2018 | As on 31.03.2017 |
|---|---|---|---|---|
| Cash Flows | ||||
| Net cash generated from operating activities | 1a | 4,777.17 | 23,137.09 | -70,837.89 |
| Net cash used in investing activities | 1b | -1,478.60 | -1,005.94 | -1,611.40 |
| Net cash used in financing activities | 1c | 2,867.23 | -24,385.59 | 79,314.41 |
| Net Increase/(Decrease) in Cash and Cash Equivalents | 1d=1a+1b+1c | 6,165.80 | -2,254.44 | 6,865.12 |
| Cash and Cash Equivalents at the beginning of the period/year | 1e | 4,610.68 | 6,865.12 | 0 |
| Cash and Cash Equivalents at the end of the period/year | 1f=1d+1e | 10,776.48 | 4,610.68 | 6,865.12 |
Ujjivan Small Finance Bank Ltd IPO Objective
- 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:
| Issue Open | Dec 2, 2019 - Dec 4, 2019 |
| Issue Type | Book Built Issue IPO |
| Issue Size | 208,333,333 Equity Shares of Rs. 10 (aggregating up to Rs.750 Cr) |
| Face Value | Rs.10 Per Equity Share |
| Issue Price | Rs.36 to Rs.37 Per Equity Share |
| Market Lot | 400 Shares |
| Listing At | BSE, NSE |
Ujjivan Small Finance Bank IPO Dates (Tentative)
| Bid/Offer Opens On | Dec 2, 2019 |
| Bid/Offer Closes On | Dec 4, 2019 |
| Final Allotment | Dec 9, 2019 |
| Initiation of Refunds | Dec 10, 2019 |
| Credit of Shares to Demat A/c | Dec 11, 2019 |
| IPO Shares Listing Date | Dec 12, 2019 |
Ujjivan Small Finance Bank IPO Lot Size (Retail)
| Lot Application | Lot Size | Cut Off Amount |
|---|---|---|
| Min 1 Lot | 400 Shares | Rs. 14,800 |
| Max 13 Lots | 5200 Shares | Rs. 192,400 |