Ujjivan Small Finance Bank is all set to launch its initial public offer (IPO) today at a price band of Rs 36 to Rs 37 per share. The small finance bank has fixed the bid lot at 400 shares and equivalent multiples thereafter and aims to garner approximately Rs 750 crore via the three-day issue.
The issue will close on December 4. According to reports, the company will use issue proceeds for augmenting its Tier – 1 capital base to meet its future capital requirements.
As per reports, around 20.27 crore shares will be offered for subscription, which will be distributed among QIB (75 per cent of the net issue; 60 per cent of QIB to Anchor Investors), non-institutional investors (15 per cent), and retail investors (10 per cent).
The issue includes a reservation of Rs 75 crore worth of shares for subscription by eligible shareholders of Ujjivan Financial Services who will get shares at a discount of Rs 2 per share.
“Post-IPO, promoter (Ujjivan Financial Services) stake will fall to ~84%, which will have to be pruned further to 40% by Jan 2022, 30% by Jan 2027 and eventually to 15% by Jan 2032, calling for continued dilution," analysts at Emkay Global Financial Services Ltd told Livemint in a note.
The Ujjivan Financial Services-controlled USFB which was established in 2017 offers small finance to underserved and unserved segments in India. The bank had a net interest income of Rs 740.4 crore, with a net profit at Rs 187.1 crore, at the end of September 2019. The Return on Equity (RoE) stood at 19.6 per cent, while Return on Asset (RoA) came in at 2.5 per cent.