Fincare Small Finance Bank intends to raise Rs. 1,330 crore through IPO

Fincare is a small finance Bank that offers smart banking services.The bank has 200 branches across India. They provide micro loans,loan against gold, Institutional finance,loan against property and a spectrum of other services. The corporate office of the bank is located in Bangalore.

 

The bank is a collaboration between 2 NBFC microfinance institutions namely,Future Financial Services and Disha Microfin. It focuses on the 3 dimensional approach i.e. Digital, Doorstep and Delightful rates.

 

In an attempt to raise Rs.1,3330 crores Fincare has submitted its first draft of prospectus with SEBI (Securities and Exchange Board of India) to raise funds through IPO(Initial Public Offering).

 

The IPO will comprise a fresh issue of shares (equivalent to 330) crores by the bank, and sale offer of 1,000 crore by promoter Fincare Business Services.The offer will include reservation for subscription by its employees.

 

The bank is funded by marquee investors including True North Fund V LLP,  Wagner, Tata Opportunities Fund, LeapFrog Investments, SIDBI and Kotak Mahindra Life Insurance.

 

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Motilal Private Equity also has a stake of Rs.185 crore ($25 million) in the bank.

 

At the time of filing DRHP, Fincare Business Services held 78.57 percent stake in Fincare SFB, Amethyst Inclusion 3.92 percent, 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.

 

Statistics reveal 30 firms raised Rs. 31,277 crore through IPO in 2020-2021.Gland Pharma Limited was successful in raising Rs. 6,480 crores through IPO. Indian Railway Finance Corporation raised Rs. 4,633 crore and UTI Asset Management was capable of securing Rs. 2,160 crore.

 

Small Finance Bank

 

• Small finance banks are extremely popular in rural India.They extend credit to small business units; small and marginal farmers; micro and small industries.

• They are established under the specific provision of RBI. These banks undertake financial inclusion.

• Their main source of income is via lending services.Small finance banks cannot extend large loans.

 

Ujjivan Small Finance Bank, Equitas Small Finance Bank, AU Small Finance Bank are some of the prominent banks that are extending credit services especially in rural India.

 

According to money control, among comparable small finance bank peers in India, the bank had the highest growth rate in advances over FY18 to FY20. Its gross loan portfolio (GLP) grew from Rs 2,154.37 crore to Rs 5,547.58 crore, registering a CAGR of 41.05 percent, from March 2018 to December 2020.