Sebi, capital market’s watchdog, has finally given the go-ahead to Suryoday Small Finance Bank, a type of niche bank in India with a license for deposits and lending to float an initial share-sale. Suryoday’s aim is to provide financial inclusion to those sections of the economy that are not entertained by other banks such as marginal farmers, small businesses, or any unorganized sector. According to the draft papers filed with the Securities and Exchange Board of India, which acts as the regulator of the securities and commodity market in India owned by the government. the IPO or Initial Public Offering contains fresh issuance of around 1,15,95,000 equity shares. It also contains an offer for sale of up to 84,66,796 equity scrips by the already existing shareholders.
The ones using the means of the Offer for Sale or OFS route to offer shares include International Financial Corporation (IFC), DWM (International) Mauritius Ltd Gaja Capital, Americorp Ventures, IDFC First Bank, Kotak Mahindra Life Insurance Company. Sebi observed the bank that filed its preliminary papers for IPO in October, on December 23rd, according to the updates provided by the markets watchdog on Monday.
The bank wants to use the net proceeds from the fresh issue to meet the future capital requirements. The said small finance bank has around 20 investors along with development funds and private equity investors. In fact, as of March 2020, the net worth of the bank was around Rs. 1000 crores and a capital adequacy ratio of 30 percent. It also has a deposit base of more than Rs. 2,800 crore and a gross loan portfolio of over Rs. 37,00 crore.
Axis Capital, SBI Capital Markets, ICICI Securities, and IIFL Securities are the merchants for this particular issue. The shares of the banks will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).