ESAF Small Finance Bank Refiles DRHP To Raise Rs 629 Cr Via IPO

To raise Rs 629.04 crore through its initial public offering (IPO), ESAF Small Finance Bank Ltd. on Monday filed its Draft Red Herring prospectus (DRHP) with capital market regulator Sebi. In July 2021, the Bank had previously submitted its DRHP for Rs 998 crore IPO. The IPO would include a fresh issuance of up to Rs 486.74 crore and an offer for sale (OFS) by the promoter and other selling shareholders up to Rs 142.30 crore. ESAF Financial Holdings Private Limited, PNB MetLife India Insurance Company Limited, and Bajaj Allianz Life Insurance Company Limited are participating in OFS to offload up to Rs 119.26 crore, Rs 12.67 crore, and Rs 10.37 crore, respectively, in the sale.

50% of the Net Offer is reserved for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Bidders and the remaining 35% for Retail Individuals according to the bank.

As per the DRHP, the fund raised via IPO will be used towards augmenting the Bank's Tier - I capital base to meet its future capital requirements. The equity shares of the company are proposed to be listed on BSE and NSE.

"The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares by a private placement or any other method aggregating up to Rs 97.33 crore ("PRE-IPO Placement"). If such placement is completed, the fresh issue size will be reduced," said ESAF Small Finance Bank in a statement.

ICICI Securities Limited, DAM Capital Advisors Limited and Nuvama Wealth Management Limited (formerly known as Edelweiss Securities Limited) are the book-running lead managers and Link Intime India Private Limited is the registrar of ESAF Small Finance Bank IPO.

According to the CRISIL MI&A Report stated in the DRHP, the bank's assets under management (AUM) jumped from Rs 8,425.93 crore to Rs 16,331.27 crore between March 31, 2021 and 2023, with a compound annual growth rate (CAGR) of 39.22%, the highest among the peers. Additionally, during the same time frame, deposits climbed from Rs 8,999.43 crore to Rs 14,665.63 crore, marking a CAGR of 27.66%, the fourth-highest rate of growth among its peers. Its Retail Deposits Ratio was the highest among its rivals as of March 31, 2023, at 90.8%.

The bank achieved a CareEdge ESG 3 (good) rating in May 2023, outperforming the sector average total score of 59.8 with a score of 71. As of March 31, 2023, ESAF Small Finance Bank served 6.83 million customers through its broad footprint of 700 banking units (including 59 business correspondent-operated banking outlets), 743 customer service centers, 20 business correspondents, 2,023 banking agents, 481 business facilitators, and 528 ATMs located throughout 21 states and two union territories.