SEBI Approves ESAF Small Finance Bank’s IPO To Raise Up To Rs 976 Crore
A woman holds the microfinance loan she has received, a stack of rupee bills, in Sadasivpet, India. (Photographer: Adeel Halim/Bloomberg)

SEBI Approves ESAF Small Finance Bank’s IPO To Raise Up To Rs 976 Crore

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ESAF Small Finance Bank has received approval from markets regulator Securities and Exchange Board of India for an initial public offering to raise as much as Rs 976 crore, the Kerala-based lender said today.

According to the draft red herring prospectus filed with SEBI on Jan. 6, the ESAF IPO comprises of a fresh issue worth Rs 800 crore and an offer for sale aggregating up to Rs 176.2 crore. The proceeds from the fresh issue will be used to augment the bank's Tier 1 capital to meet future capital requirements.

Of the total offer, 75 percent will be available for allocation to qualified institutional buyers, 15 percent to non-institutional bidders and 10 percent to retail individual bidders.

According to ESAF Small Finance Bank’s latest available financials, microfinance loans accounts for 95.75 percent of total gross advances. Its loan book outside Kerala has grown from Rs 549 crore in March 2017 to Rs 2,540 crore as on Sept. 30, 2019. This is 48.46 percent of the total microfinance loan book size, while total gross advance as on Sept. 30, 2019, stood at Rs 5,474 crore.

ESAF currently operates in 16 states and one union territory through its 403 branches and 38 ultra-small branches, serving over 37.3 lakh customers.

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