Ujjivan Financial Services IPO subscribed 0.75 times on day two

Receives bids for 2.23 crore shares

The initial public offer (IPO) of microfinance firm Ujjivan Financial Services received bids for a total of 2.23 crore shares on the second day of bidding for the IPO today, 29 April 2016, as per data from the National Stock Exchange (NSE) website at 17:00 IST. The IPO was subscribed 0.75 times.

Ujjivan Financial Services has raised Rs 264.74 crore by selling 1.26 crore shares to anchor investors ahead of the opening of the company's initial public offer (IPO). The shares were allotted to the anchor investors at Rs 210 per share, the top end of the Rs 207 to Rs 210 per share price band for the IPO.

Anchor investors allotted shares of Ujjivan Financial Services include Birla Sunlife Trustee Company, ICICI Prudential, UTI Mutual Fund, Reliance Capital Trustee Company, Sundaram Mutual Fund, Tata Mutual Fund, HDFC Standard Life Insurance Company, Bajaj Allianz Life Insurance Company, Reliance Life Insurance Company, Max Life Insurance Company, Tata AIA Life Insurance Company, BNP Paribas, LIC Nomura Mutual Fund, Canara Robeco Mutual Fund, Forefront Alternative Investment Trust and Canara HSBC Oriental Bank of Commerce Life Insurance Company.

Ujjivan Financial Services' initial public offer (IPO) comprises of fresh issue of shares up to Rs 358.16 crore and offer for sale of up to 2.49 crore shares by existing shareholders. The IPO opened for bidding on 28 April 2016 and closes on 2 May 2016.

Among the selling shareholders, International Finance Corporation is selling 30.60 lakh shares, Elevar Equity Mauritius is selling 34.95 lakh shares, India Financial Inclusion Fund is selling 17.54 lakh shares, Mauritius Unitus Corporation is offloading 25.23 lakh shares, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. is selling 26.98 lakh shares, Sarva Capital LLC is selling 29.35 lakh shares, WCP Holdings III is selling 30.93 lakh shares and Women's World Banking Capital Partners, L.P. is offloading 54.06 lakh shares via the IPO.

Ujjivan Financial Services is transforming itself into a small finance bank (SFB). It is one amongst the 10 companies in India to receive in-principle approval from the RBI to set up a small finance bank. As per the regulatory requirements, the foreign shareholding in the company is to be brought down before it converts itself into a small finance bank. This is one of the reasons why existing foreign investors in the company are pruning their stake in Ujjivan Financial Services through the IPO.

The company proposes to utilise the proceeds from the fresh issue of shares for augmenting its capital base to meet future capital requirements. Ujjivan Financial Services is one of the leading microfinance companies in India. The company's business is primarily based on the joint liability group-lending model for providing collateral free, small ticket-size loans to economically active women. The company also gives individual loans to Micro & Small Enterprises. The company's operations are spread across 24 states and union territories and 209 districts across India.

The company reported net profit of Rs 122.30 crore on revenue from operations of Rs 713.20 crore for 9 months ended 31 December 2015. Net profit stood at Rs 75.78 crore on revenue from operations of Rs 599.31 crore for the year ended 31 March 2015.

The ratio of gross non-performing assets as a percentage of net assets under management (AUM) stood at 0.15% as on 31 December 2015. The net AUM is arrived at after deducting assets securitized/assigned from gross AUM. The ratio of net non-performing assets as a percentage of net AUM stood at 0.04% as on 31 December 2015.

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