Utkarsh Small Finance Bank sets IPO price band at Rs 23-25 per share

The initial public offering (IPO) of Utkarsh Small Finance Bank has set a price range of Rs 23-25 per share, with subscriptions commencing the following week. Equity shares can be purchased for between 2.3 and 2.5 times their par value.

Subscriptions for the public issue will be accepted beginning on July 12 and closing on July 14. The anchor book auction will take place on July 11.

The fresh issue part of the small finance bank's initial public offering (IPO) is expected to raise 500 crore rupees. The offer reserved up to Rs 5 crore, or 20 lakh shares, or 1% of the issue size, for its workers.

The net proceeds from the issuance, after deducting issue charges, will be used to increase its Tier-1 capital base to satisfy future capital requirements.

Retail investors can apply for a minimum of 600 equity shares at a price of Rs 15,000 per lot, and their maximum investment would be Rs 1.95 lakh for 13 lots, at an upper price band, as their investment can go above and beyond Rs 2 lakh in any IPO.

Qualified institutional purchasers can purchase up to 75% of the issue size, high net worth individuals 15%, and regular investors 10%.

According to CRISIL, Utkarsh Small Finance Bank, located in Varanasi, grew its gross loan portfolio at the third-fastest rate among SFBs with a gross loan portfolio of more than Rs 6,000 crore between FY19 and FY23.

Utkarsh Small Finance Bank was founded in April 2016 as a wholly-owned subsidiary of promoter Utkarsh CoreInvest, which had received in-principle clearance from the Reserve Bank of India (RBI) to establish a small finance bank in October 2015.

Utkarsh CoreInvest, which received its RBI license in November 2016, has completed the going-concern transfer of its microfinance business to the small finance bank, which opened for business in January 2017.

As of March 2023, Utkarsh SFB had 830 banking outlets and 15,424 employees across 26 states and Union Territories. Of its 3.59 million customers, 30.88 percent were located in rural and semi-urban areas in Bihar and Uttar Pradesh, and 25.98 percent were located in these same areas.

The bank established partnerships with 13 business correspondents and 321 direct selling agents to expand its presence in emerging markets.

After Ujjivan, AU, Equitas, and Suryoday, this would be the sixth small financing bank to be listed on the bourses.

Merchant bankers for the offering include ICICI Securities and Kotak Mahindra Capital Company, with Kfin Technologies serving as the registrar.