Utkarsh Small Finance Bank IPO: A Comprehensive Analysis 2023
Utkarsh Small Finance Bank IPO is a great opportunity for small investors to get in on the action. Here's what you need to know about the IPO.
Introduction
The Indian financial market is anticipating a major event – the Initial Public Offering (IPO) of Utkarsh Small Finance Bank, a prominent player in the financial ecosystem of India. For investors eyeing this opportunity, it's crucial to gather all the relevant information about the IPO. This article serves as a comprehensive guide, providing an exhaustive analysis of the Utkarsh Small Finance Bank IPO.
Quick Facts about Utkarsh Small Finance Bank
Utkarsh Small Finance Bank, promoted by Utkarsh CoreInvest, began its journey as a Non-Banking Financial Company (NBFC) in 2010, primarily catering to the underserved and unserved segments in Uttar Pradesh and Bihar. Following the Reserve Bank of India's in-principle approval in 2015, Utkarsh CoreInvest established Utkarsh Small Finance Bank in 2016. The bank commenced operations in January 2017, extending its services across 26 states and Union territories.
Important Dates for the IPO
The public issue of Utkarsh Small Finance Bank is scheduled to open on July 12 and close on July 14. The anchor book, which is reserved for Qualified Institutional Buyers (QIBs), was opened a day earlier on July 11.
Price Band and Issue Size
The bank has set the price band for its IPO at ₹23-25 per share. Through this public issue, Utkarsh Small Finance Bank intends to raise ₹500 crore, which will be entirely done through a fresh issue of shares.
Purpose of the Issue
The primary goal of this IPO is to augment the bank's Tier - 1 capital base, which will aid in meeting future capital requirements. In addition, a portion of the proceeds will be used to cover issue-related expenses.
Lot Size and Investment Range
Investors can bid for a minimum of 600 equity shares and in multiples of 600 shares thereafter. Hence, the minimum investment by retail investors would be ₹15,000 for one lot, while the maximum investment would be ₹1.95 lakh for 13 lots.
High net-worth individuals (non-institutional investors) with a capital in the range of ₹2-10 lakh will make a minimum investment of ₹2.1 lakh for 14 lots, and their maximum investment would be ₹9.9 lakh for 66 lots. High net-worth individuals with minimum capital of ₹10 lakh can invest a minimum of ₹10.05 lakh for 67 lots.
Reservation for Different Categories of Investors
The issue size allocates 75 percent for Qualified Institutional Buyers (QIBs), 15 percent for high net-worth individuals, and the remaining 10 percent for retail investors.
Bank's Financial Health
Utkarsh Small Finance Bank has reported a robust financial performance, with deposits in FY23 growing 36 percent to ₹13,710 crore compared to the previous year. The profit for the financial year ended March FY23 surged significantly by 558 percent to ₹404.5 crore compared to the previous year.
Risk Factors
Like any other investment option, investing in this IPO comes with its set of risks. These include the company being subject to inspections by regulatory authorities, including the RBI, its dependence on key managerial personnel and senior management, and the potential inadequacy of insurance coverage to cover claims.
Listing and Allotment Dates
The finalization of the basis of allotment of IPO shares is expected to take place by July 19. The successful investors will get shares in their Demat accounts by July 21, with the refunds credited to the bank accounts of unsuccessful investors by July 20.
FAQS:
1. Is Utkarsh Small Finance Bank approved by RBI?
Utkarsh Small Finance Bank Limited (USBL) is a Scheduled Commercial Bank that is registered with the Reserve Bank of India (RBI) under Section 22 (1) of the Banking Regulation Act, 1949. The bank obtained its license as MUM No. 125 on November 25, 2016. USFBL provides a comprehensive range of banking products and services, including microfinance loans, retail asset loans (including Micro, Small, and Medium Enterprise loans), housing loans (HL), wholesale lending, deposit accounts (current accounts, savings accounts, fixed deposits, and recurring deposits), insurance, mutual funds, remittances, institutional, government, and TASC services.
USFBL also offers an extensive array of payment services, such as debit cards, ATMs, POS payments, and various digital offerings like internet banking, mobile banking, and payments through NEFT, RTGS, and IMPS. The bank's headquarters are located in Varanasi, Uttar Pradesh. USFBL operates in multiple states across India, including Assam, Bihar, Chandigarh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, the National Capital Territory of Delhi, Odisha, Rajasthan, Telangana, Uttar Pradesh, Uttarakhand, and West Bengal.
2. Who are Utkarsh Small Finance Bank competitors?
AU Small Finance Bank, Fincare Small Finance Bank, and Ujjivan Small Finance Bank are the primary contenders for Utkarsh CoreInvest Limited. Nonetheless, Utkarsh CoreInvest Limited is fiercely competing with them in the finance sector and emerging victorious in certain battles.
3. Who is the present CEO of Utkarsh Small Finance Bank?
At Utkarsh Small Finance Bank, Govind Singh holds the position of MD and CEO. Additionally, he has contributed as a member of the Working Group responsible for reviewing the Business Correspondent (BC) Model in India. Before establishing Utkarsh, Govind Singh served as the Business Head for Micro Banking in ICICI Bank Ltd.'s Rural, Micro & Agri Business Group.
4. What is the issue size of Utkarsh Small Finance Bank IPO?
The initial public offering (IPO) of Utkarsh Small Finance Bank has an issue size of Rs 500 crore.
5. Who is the registrar of Utkarsh Small Finance Bank IPO?
Kfin Technologies Limited is the registrar for the Utkarsh Small Finance Bank IPO. To access the Utkarsh Small Finance Bank IPO allotment status, you can visit the registrar's official website.
6. What is the price band for Utkarsh Small Finance Bank IPO?
Utkarsh Small Finance Bank announced on Monday that it has established a price band of Rs 23-25 per share for its Rs 500-crore initial public offering (IPO).
7. What is Utkarsh Small Finance Bank IPO?
As per the red herring prospectus (RHP), the Utkarsh Small Finance Bank IPO consists solely of a fresh issue of equity shares, amounting to ₹500 crore, and does not include any offer for sale (OFS) component. The face value of each equity share is ₹10.
Conclusion
While the Utkarsh Small Finance Bank IPO presents an attractive investment opportunity, it is crucial for potential investors to thoroughly research and understand the bank's financial health, performance, and potential risks before making an investment decision.
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Disclaimer: The information provided in this article is for informational purposes only and should not be considered as investment advice. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Utkarsh Small Finance Bank.