Ujjivan Financial gets Sebi clearance for IPO

Microfinance lender Ujjivan Financial Services has received capital markets regulator Sebi's approval to float an initial public offering.
The company, which had filed its draft red herring prospectus (DRHP) with Sebi on December 31 for launching the IPO, obtained clearance from the regulator on February 25 according to the latest update.
The IPO comprises fresh issue of equity shares worth up to Rs 650 crore and an offer for sale of up to 2,49,68,332 equity shares by the existing shareholders.
Earlier this month, Ujjivan Financial Services raised Rs 300 crore from a clutch of investors in a pre-IPO placement. This funding valued the company at around Rs 2,000 crore.

Since the pre-IPO placement is completed, the number of equity shares issued will be reduced from the fresh issue, subject to regulatory requirements, the company had said.
This is the second microfinance institution after Equitas Holding to approach the Securities and Exchange Board of India (Sebi) for an IPO this year.

Till date, only one microfinance firm SKS Microfinances has tapped the capital markets. In 2010, SKS raised Rs 1,654 crore in its maiden public offering.
Ujjivan Financial Services has also received an in-principle nod from Reserve Bank to set up small finance banks.
The selling shareholders who would participate in the Offer For Sale include Elevar Equity Mauritius, International Finance Corp, India Financial Inclusion Fund, Mauritius Unitus Corporation, Nederlandse Financierings- Maatschappij voor Ontwikkelingslanden. Sarva Capital LLC, WCP Holdings and Women's World Banking Capital Partners.

The proceeds of the issue would be utilised towards augmenting the company's capital base to meet future capital requirements.
In addition, the company "intends to reduce its foreign shareholding in accordance with the requirements of the SFB's (Small Finance Bank) in-principle approval to set up an SFB."
As per RBI's conditions, the shares of the SFB also need to be mandatorily listed within a period of three years from the date of commencement of business of the Bank.
The issue is being managed by Kotak Mahindra Capital Company, Axis Capital, ICICI Securities and IIFL Holdings.
The equity shares are proposed to be listed on BSE and NSE.