Utkarsh Small Finance Bank, based in Varanasi, is set to open its initial public offering (IPO) for subscription on Wednesday. The IPO will close on July 14, as stated in the red herring prospectus. Before the official opening, anchor investors will be able to submit their bids on Tuesday. The price band has been fixed at Rs 23-25 per share.
The bank’s objective is to raise up to Rs 5 crore through a fresh issue of shares. Bidding will commence on July 11. As part of the IPO, the bank has reserved up to 1 percent of the issue size for its employees, which amounts to 20 lakh shares worth Rs 5 crore. The funds raised will be utilized to strengthen its Tier-1 capital base and meet future capital requirements, as well as to cover issue expenses.
Potential investors can bid for a minimum of 600 equity shares and in multiples of 600 shares thereafter. This means that investors can apply for shares worth a minimum of Rs 15,000 and a maximum of Rs 1.95 lakh for 13 lots at the upper band.
Out of the total shares available, 75 percent have been reserved for qualified institutional buyers, 15 percent for high net worth individuals, and the remaining 10 percent for retail investors.
According to a report by CRISIL, Utkarsh Small Finance Bank recorded the third-fastest gross loan portfolio growth between FY19 and FY23 among small finance banks (SFBs) with a gross loan portfolio exceeding Rs 6,000 crore.
Promoter Utkarsh CoreInvest established Utkarsh Small Finance Bank as a wholly-owned subsidiary in April 2016. The Reserve Bank of India had granted the bank in-principle approval in October 2015 to operate as a small finance bank.
As of March 2023, Utkarsh Small Finance Bank operates across 26 states and Union Territories, with a network of 830 banking outlets and 15,424 employees. The bank primarily focuses on rural and semi-urban areas, particularly Bihar and Uttar Pradesh. Approximately 30.88 percent of their total gross loan portfolio comes from Bihar, while 25.98 percent comes from Uttar Pradesh.
