ESAF Small Finance Bank IPO: A Chance to Invest in a Growing Bank

Hey folks! Guess what? ESAF Small Finance Bank is all set to launch its initial public offering (IPO) on November 3. Exciting, right? They are planning to raise a whopping ₹463 crore from the IPO, which will be open for subscription until November 7.

Now, let me break it down for you. The IPO price band is yet to be announced, but here’s what we know so far. The IPO consists of a fresh issue of equity shares worth ₹390.7 crore by the company itself, and an offer-for-sale (OFS) of equity shares worth ₹72.3 crore by three shareholders.

In the OFS, the promoter ESAF Financial Holdings will sell shares worth ₹49.26 crore, while PNB MetLife India Insurance Company and Bajaj Allianz Life Insurance Company will offload shares worth ₹23.04 crore.

The allotment of IPO shares will be finalized on November 10, and eligible investors will receive their shares in their demat accounts on November 15. And mark your calendars, because ESAF Small Finance Bank shares are expected to be listed on November 16 on both the BSE and NSE.

Now, let’s talk about who can invest in this IPO. About 50% of the issue is reserved for qualified institutional buyers (QIB), 15% for non-institutional investors, and 35% for retail investors. And here’s a cool fact: ESAF Small Finance Bank has also reserved equity shares worth up to ₹12.5 crore for its employees. How awesome is that?

The book-running lead managers for this IPO are ICICI Securities, DAM Capital Advisors, and Nuvama Wealth Management. And the IPO registrar is Link Intime India.

So, what will ESAF Small Finance Bank do with the funds raised from the IPO? They plan to use the net proceeds to strengthen their Tier – I capital base and meet future capital requirements. Smart move, right?

Now, let me give you a little background on ESAF Small Finance Bank. As of March 31, 2023, they have a network of 700 banking outlets and 767 customer service centres. Impressive, isn’t it?

In the financial year 2022-23, the bank’s net profit skyrocketed to ₹302.3 crore from ₹54.73 crore in the previous year. Talk about growth! Their net interest income (NII) also saw a significant increase, rising by 60% year-on-year to ₹1,836.3 crore.

ESAF Small Finance Bank’s asset under management (AUM) grew from ₹8,425.93 crore in March 2021 to ₹16,331.26 crore in March 2023, registering a compound annual growth rate (CAGR) of 39.22%. That’s the highest CAGR among its peers. And their deposits also witnessed impressive growth, increasing from ₹8,999.42 crore in March 2021 to ₹14,665.62 crore in March 2023, with a CAGR of 27.66%.

So, my friends, if you’re looking for an opportunity to invest in a growing bank, the ESAF Small Finance Bank IPO is your chance. Keep an eye out for the price band announcement and get ready to grab your share of this exciting offering!

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