Suryodaya Small Finance Bank looks to raise Rs 582 crore through IPO; all you need to know

The Initial Public Offer comprises up to 19,093,070 equity shares of the face value of Rs 10 each. It includes a fresh issue of  8,150,000 equity shares & Offer for Sale (OFS) of up to 10,943,070 equity shares. At the lower end of the price band, the bank will raise approximately Rs 577 crores and at the upper end, Rs 581 crores. The bank would have a post Issue implied market cap of Rs 3,216 - 3,237 crores

Suryodaya SFB raised a little over Rs 150 crore in a pre-IPO placement. The placement of 5,208,226 equity shares at a price of Rs 291.75 per equity share comprised of (i) private placement of 3,084,833 equity shares to SBI Life Insurance aggregating to approximately Rs 90 crores (ii) private placement of 1,713,795 equity shares to Axis Flexi Cap Fund aggregating to approximately Rs 59 crores; (iii) private placement of 342,760 equity shares to Axis Equity Hybrid Fund aggregating to approximately Rs 10 crores; and (iv) private placement of 66,838 equity shares to Kiran Vyapar aggregating to approximately Rs 1.95 crore.

Axis Capital, ICICI Securities, IIFL Securities, and SBI Capital Markets.

The bank’s Gross Loan Portfolio has grown at a CAGR of 46.98 percent from Rs 1,717.78 crore as of March 31, 2018 to Rs 3,710.84 crore as of March 31, 2020 and was Rs 3,908.23 crore as of December 31, 2020. On the liability side, their products comprise current accounts, savings accounts, salary savings accounts and a variety of deposit accounts including recurring deposits and fixed deposits that they source from customers across India. Their deposits have grown at a CAGR of 94.95 percent from Rs 749.52 crore as of March 31, 2018 to Rs 2,848.72 crore as of March 31, 2020 and was Rs 3,343.84 crore as of December 31, 2020. The bank posted a profit after tax of Rs 54.86 crore for the quarter ending December 31, 2020.

The Bank’s proforma gross NPA ratio as of December 31, 2020 was 9.28 percent (versus 0.78 percent reported gross NPA), and net NPAs at 5.38 percent, on a proforma basis ( versus reported net NPA of 0.33 percent).

It commenced operations as a microfinance institution in 2009, and following conversion to a SFB, diversified into other products like commercial vehicle loans, affordable home loans, micro business loans, secured and unsecured business loans to MSME/SME and corporates and financial intermediary group loans.

Microfinance loans constitute a significant portion of Gross Loan Portfolio, at 70.35 percent as of December 31, 2020. Commercial vehicle loans represented 9.42 percent, affordable housing loans 6.30 percent, micro business loans 0.99 percent, unsecured MSME/SME loans 1.02 percent,  secured business loans 3.63 percent,  financial intermediary group loans 4.78 percent, and other loans represented 3.51 percent of Gross Loan Portfolio. It currently has 554 Banking Outlets across 13 states and union territories.