Utkarsh Small Finance Bank has filed draft share sale documents with the Securities Exchange Board of India to raise ₹1,350 crore through an initial public offering (IPO).
The offer comprises a fresh issue of up to ₹750 crore and an offer for sale by Utkarsh Coreinvest Ltd, aggregating up to ₹600 crore.
The lender said that it may consider a pre-IPO placement of shares of up to ₹250 crore after consultations with the investment banks managing the share sale.
The proceeds from the issue will be utilized towards the augmentation of Tier-I capital base to meet its future capital requirements. As of September 2020, its CRAR was 24.87% (Tier I capital of 19%).
For the fiscal year 2020, the total income of the lender was ₹1,406.24 crore against ₹958.25 crore a year ago. Net profit for the period was ₹186.74 crore against ₹110.87 crore last year. Provisions for the period were ₹163.55 crore against ₹136.05 crore in the year-ago period.
As of September 2020, its total deposits stood at ₹5,969.30 crore, while advances were ₹6,606.58 crore. Its gross non-performing assets (NPAs) were at 0.64% and provision coverage ratio at 101.99%.
The lender has warned that its NPAs may increase because of several factors, including increased competition, adverse effects on the business and the results of operations of borrowers, a rise in unemployment, a sharp and sustained rise in interest rate, slow industrial and business growth, changes in customer behaviour and demographic patterns, political influences and central and state government decisions and changes in regulations.