Bengaluru-based microlender CreditAccess Grameen Ltd. plans to raise Rs 1,131 crore through an initial public offering.
The offer, which is a combination of fresh issue and offer-for-sale, opens on Aug. 8 at a price band of Rs 418-422. The lender, promoted by Netherlands-based CreditAccess Asia N V, will use proceeds worth Rs 630 crore from the fresh issue in augmenting its capital base to meet growth requirements in loans and other investments.
CreditAccess Grameen provides loans to women from low-income households in rural areas—mainly in Maharashtra and Karnataka— under the joint liability group model, which comprised 87 percent of its loan portfolio as on Mar. 31.
The lender also said it will continue to focus on lending to women for the next five years. “We aren’t going to change our methodology,” Udaya Kumar, managing director and chief executive officer of India’s third-largest microfinance institution, told BloombergQuint. “We continue to serve rural women because the potential is quite huge.”
Rural credit accounts for 10 percent of the total outstanding credit in the country, compared to 90 percent for urban India, despite its contribution to nearly half of the country's gross domestic product. “The growth opportunity is quite large in the current market in which we are operating.”
The book-running lead managers for the offer are ICICI Securities, Credit Suisse Securities (India), IIFL Holdings and Kotak Mahindra Capital.