Fincare Small Finance Bank, on May 9, filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 1,330 crore through an initial public offering.
The IPO will have a fresh issue of Rs 330 crore and an offer for sale of Rs 1,000 crore by its promoter entity Fincare Business Services Ltd which holds a 78.57 percent stake in the bank.
Fincare Small Finance Bank will use the proceeds to augment tier-1 capital base to meet its future capital requirement.
Fincare is a "digital-first" Small Finance Bank (SFB) with a focus on under-banked and unbanked customers, in rural and semi-urban areas.
It was one of the 10 applicants out of the total of 72 to receive the Reserve Bank of India (RBI) approval for conversion into an SFB under the guidelines for this new class of banks issued by the central bank in 2015. Before this, the bank was conducting business from two entities Disha Microfin in west India and Future Financial Services in south India, under a single overarching management team. It started banking operations in July 2017.
Earlier this month, Motilal Oswal Private Equity through its India Business Excellence Fund III picked up a minority stake in Fincare Small Finance Bank, for around Rs 185 crore, providing a partial exit to True North Fund, one of the key investors.
At the time of filing DRHP, Amethyst Inclusion held a 3.92 percent stake in Fincare SFB, Wagner 2.48 percent, True North Fund V LLP 2.34 percent, Indium IV (Mauritius) Holdings 2.27 percent, and Omega TC Holdings 1.18 percent.
According to CRISIL, the bank had the highest growth rate in advances over the fiscal year 2018 to the fiscal year 2020, comparing to its peer. Its gross loan portfolio (GLP) grew from Rs 2,154.37 crore to Rs 5,547.58 crore, from March 2018 to December 2020.
The growth of the bank was mainly driven by growth in borrowers from 1.02 million as of March 2018 to 2.19 million as of December 2020.
