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AU Small Finance Bank Lists At 48% Premium To Issue Price

The Rs 1,912 crore initial public offering had been subscribed 53 times.

AU Small Finance Bank gets listed on the National Stock Exchange. (Source: BloombergQuint)
AU Small Finance Bank gets listed on the National Stock Exchange. (Source: BloombergQuint)

AU Small Finance Bank Ltd. listed at Rs 530, a 48 percent premium to its issue price, on the BSE.

The Rs 1,912-crore initial public offering had been subscribed 53 times, with the retail segment getting a demand for 3.4 times the shares on offer. Qualified institutional buyers and high net worth individual segments were subscribed 78.77 times and 143.51 times, respectively.

It sold shares in open bidding at Rs 355-358 apiece in the IPO from June 28-30. Of the total offer, the Jaipur-based company raised Rs 536 crore from 34 anchor investors.

The public issue was an offer for sale by promoters Sanjay Agarwal, Jyoti Agarwal, Shakuntala Agarwal, Chiranji Lal Agarwal and MYS Holdings; and investors Redwood Investment, International Finance Corporation, Labh Investments, Ourea Holdings and Kedaara Capital Alternative Investment Fund. Hence, the company will not receive any proceeds from the offer.

AU Small Finance Bank Lists At 48% Premium To Issue Price

The company’s current capital adequacy ratio stands at 21 percent against a regulatory requirement of 15 percent and the management believes they will not need to raise further capital at least for the next three to five years.

ICICI Securities, HDFC Bank, Motilal Oswal Investment Advisors and Citigroup Global Markets India are the lead managers for the issue.

Founded in 1996 as a non-deposit taking asset finance company by Sanjay Agarwal, AU Small Finance Bank was one of the 10 entities that received the licence from the Reserve Bank of India. It lends to low and middle-income individuals and small and medium businesses. The lender has 269 branches across 10 states, and Rajasthan contributes more than half of its assets under management. Vehicle loans contribute half of its advances, and it plans to enter gold, housing and farm lending segments.

The Group which had divested its housing finance arm before securing a small bank licence from the Reserve Bank of India, now plans to reopen the division under AU Small Finance Bank, said the lender’s Wholetime Director Uttam Tibrewal, in an interview to BloombergQuint. RBI regulation mandates that a bank’s promoter can not run another lending division outside the bank.