Ujjivan Small Finance Bank IPO fully subscribed on day 1

Receives bids for 20.14 crore shares

The initial public offer (IPO) of Ujjivan Small Finance Bank received bids for 20.14 crore shares today, 2 December 2019, as against 12.39 crore shares on offer, as per the National Stock Exchange of India (NSE) website data at 17:00 IST. The issue was subscribed 1.62 times.

The issue opened for bidding today, 2 December 2019 and it will close on Wednesday, 4 December 2019. The price band has been fixed at Rs 36 to Rs 37 per share.

Ahead of the opening of the IPO, the board of directors of the bank at its meeting held on 29 November 2019, finalized allocation of 8,20,94,594 equity shares to anchor investors at Rs 37 per share.

Ujjivan Small Finance Bank commenced operations on 1 February 2017. It is a mass market focused small finance bank (SFB) in India, catering to unserved and underserved segments. The bank is promoted by Ujjivan Financial Services (UFSL) - an NBFC which began operations in 2005.

In terms of the RBI in-principle approval, RBI final approval and SFB (small finance bank) licensing guidelines, the bank is required to list its equity shares on the stock exchanges within three years from the date of commencement of business by the bank, i.e., 31 January 2020. The bank proposes to utilize the net proceeds from the issue towards augmenting tier - 1 capital base to meet future capital requirements. Further, there will be the benefits of listing of the equity shares on the stock exchanges, enhancement of the brand name and creation of a public market for equity shares in India.

The bank is spread across 24 states and union territories end March 2019. The bank has strong 4.94 million customers base operated from 552 Banking Outlets end September 2019. In FY2019 alone, the bank has operationalized 287 banking outlets. The bank has a network of 441 ATMs (including 18 ACRs), two 24/7 phone banking units based in Bengaluru and Pune that service customers in 11 languages, and a mobile banking application that is accessible in five languages as well as internet banking facility for individual and corporate customers.

The deposits base has galloped from Rs 206.41 crore end March 2017 to Rs 7379.44 end March 2019 and Rs 10129.85 crore end September 2019. The share of retail deposits has increased from 3.15% end March 2017 to 41.93% end September 2019. Casa to total deposits ratio has improved from 1.57% end March 2017 to 10.63% end March 2019 and was 11.87% end September 2019.

The bank has stable asset quality with gross NPA ratio at 0.85% net NPA at 0.33% end September 2019. The bank has raised the share of secured advances from 1.83% end March 2017 to 13.59% end March 2019 and 19.39% end September 2019. The bank has healthy capital adequacy ratio of 18.84% with tier I capital ratio of 18.16% end September 2019.

Ujjivan Small Finance Bank reported a net profit of Rs 187.11 crore on a net interest income of Rs 740.42 crore for the six months ended on 30 September 2019.

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