India: Fincare Small Finance Bank files draft papers for $182m IPO

Photo by Micheile Henderson on Unsplash

Fincare Small Finance Bank (Fincare SFB) on Sunday filed a draft red herring prospectus with the markets regulator Securities Exchange Board of India to raise 1,330 crore via an initial public offering (IPO).

Fincare is a “digital-first” SFB with a focus on unbanked and under-banked customers, especially in rural and semi-urban areas.

The IPO comprises a fresh issue of 330 crore and an offer for sale of 1,000 crore by the bank’s promoter entity Fincare Business Services Ltd. Fincare Business holds 78.57% stake in the bank.

On 3 May, Mint reported that the India Business Excellence Fund–III, managed and advised by Motilal Oswal Private Equity (MOPE), invested $25 million in a minority stake in Fincare Small Finance Bank (SFB) through a secondary acquisition.

Fincare SFB is a Bengaluru-based microfinance institution-non-banking financial company turned SFB. Fincare was one of the 10 applicants out of the total of 72 to receive the Reserve Bank of India (RBI) approval for conversion into a SFB under the guidelines for this new class of banks issued by the central bank in 2015.

Before converting into a SFB, the microfinance lender was largely conducting business from two entities, Disha Microfin based in west India and Future Financial Services based in south India, under a single overarching management team. It started banking operations in July 2017.

Proceeds from the fresh issue of shares will be used for augmenting the bank’s tier-1 capital base to meet its future capital requirement.

As of December 2020, its total CRAR stood at 29.90%.

As of December 2020, gross NPA to advances was at 3.46%, while net NPA to advances stood at 1.88%.

As of December 2020, the lender had provisions amounting to 214.38 crore for loans which includes provisions for increased risk of deterioration of loan portfolio on account of macroeconomic factors caused by the covid-19 pandemic, the bank said in its draft prospectus.

The lender had 2.68 million deposit accounts. Its total deposits were at 5,276.65 crore.

The bank has a network of 528 banking outlets, 219 business correspondent outlets and 108 ATMs spread across 16 states and three Union territories, covering 192 districts and 38,809 villages.

ICICI Securities, Axis Capital, IIFL Securities, SBI Capital Markets and Ambit Pvt. Ltd are managing the bank’s IPO.

This article was first published on livemint.com.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.