Mr Neeraj Swaroop, Independent Director and Chairperson SBFC Finance Ltd – File Photo GPN
MUMBAI, 28 JULY, 2023 (GPN): Mumbai based SBFC Finance Ltd initial public offering (IPO) opens for subscription on Thursday, August 3, and closes on Monday, August 7. The allocation to anchor investors for SBFC Finance IPO is scheduled to take place on Tuesday, August 2. The price band for SBFC Finance IPO is to be announced by the company on Monday, 31st July 2023.
SBFC Finance IPO comprises of fresh issuance of equity shares worth Rs 600 crore and an OFS (Offer For Sale) of Rs 425 crore, according to the Red Herring Prospectus (RHP). The total offer size of SBFC Finance IPO now is Rs 1,025 crore.
In March, SBFC Finance refiled its IPO papers with capital market regulator Securities and Exchange Board of India (SEBI), where they reduced the IPO size to Rs 1,200 crore from Rs 1,600 crore earlier.
Selling shareholders under the OFS include Arpwood Partners Investment Advisors, will be offering equity shares for Rs 306 crore; Arpwood Capital; and Eight45 Services, would sell shares for up to Rs 75 and Rs 43 crore, respectively.
In accordance with the RHP, SBFC Finance intends to use the net proceeds to meet future Capital requirements that are anticipated to result from the expansion of their company’s operations and assets, including but not limited to, onward lending under company’s lending verticals, namely, MSME loans and loans against gold, ensuring compliance with relevant regulatory requirements, payments of operating expenses, and funding growth opportunities.
“As of March 31, 2023 our Company’s Capital to Risk Weighted Assets Ratio (CRAR) was Rs 14,135.76 million (equivalent to 31.90%) of which the Tier I capital was Rs 14,049.52 million (equivalent to 31.71%) and our Tier II capital was Rs 86.24 million (equivalent to 0.19%). We anticipate that the Net Proceeds will be sufficient to satisfy our company’s Tier- I capital requirements,” said the company in its RHP.
The size of the fresh issue has also been lowered as a result of the company’s completion of a private placement of up to ₹150 crore, which was done in conjunction with the promoter-selling shareholders and the book-running lead managers.
The book-running lead managers (BRLM) for the offer are ICICI Securities, Axis Capital and Kotak Mahindra Capital Company, while Kfin Technologies Ltd is the registrar for the IPO.
SBFC Finance IPO’s basis of allotment of shares will be finalised on Thursday, August 10 and the company will initiate refunds on Friday, August 11, while the shares will be credited to the demat account of allottees on Monday, 14 August. SBFC Finance IPO shares are likely to be listed on BSE and NSE on Wednesday, August 16.
Led by a veteran banker, Neeraj Swaroop, SBFC Finance, is one among the MSME-focused NBFCs in India, also it had one of the highest assets under management (“AUM”) growth, at a CAGR of 40% in the period from Fiscal 2019 to Fiscal 2022, according to a CRISIL Report mentioned in the DRHP. It has the lowest proportion of AUM arising out from the largest state in its portfolio and has maintained so despite its growth since its inception in 2017. Mr. Aseem Dhru, MD & CEO, SBFC Finance Ltd and Mr. Mahesh Dayani, CBO will be announcing the IPO alongwith the Chairman.
Neeraj Swaroop is an Independent Director and Chairperson of the Board. He holds a bachelor’s of technology degree in mechanical engineering from Indian Institute of Technology, Delhi and a post graduate diploma in management from Indian Institute of Management, Ahmedabad. He has been associated with SBFC Finance since November 21, 2017. Prior to joining the Company, he was associated with Pond’s (India) Limited, Bank of America, HDFC Bank Limited, Standard Chartered Bank and Singapore Exchange Limited and he is currently a visiting faculty at S.P. Jain Institute of Management & Research, Mumbai.
SBFC provides financing opportunities to business owners who are underserved by traditional banks. Our approach is to reimagine lending. The non banking lender have developed a “PhyGital” model which uses technology and authentic in-person service to create loans which support the ambitions of customers.
As of December 31, 2022, the average ticket size (“ATS”) of its Secured MSME Loans, Loans against Gold and other unsecured loans, on the basis of disbursed amounts was Rs 0.98 million, Rs 0.10 million and Rs 0.69 million, respectively. SBFC Finance focuses on disbursing loans with a ticket size in the range of Rs 0.50 million to Rs 3.00 million and as of December 31, 2022, 86.48% of its AUM had ticket sizes in this range. It has a 137 branch footprint in 105 cities across 16 states and 2 union territories and has grown from 40,432 customers in FY20 to 94,997 customers as on December 31, 2022.
Sebi Link: https://www.sebi.gov.in/
RHP: https://investmentbank.
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