Capital Small Finance Bank fixes Rs 445-468 as price band for its IPO

Capital Small Finance Bank on Friday fixed Rs 445-468 per share as the price band for its Rs 523-crore initial public offer opening on February 7.

The issue consists of Rs 450 crore of fresh issue and the remaining Rs 73 crore of offer for sale through which promoters and external investors will dilute 5 per cent of their pre-issue holdings.

The Jalandhar-based bank, which began operations in 2016 after converting itself from a local area bank, is 24 per cent owned by the promoter family led by Sarvjit Singh Sarma and his family, which will come down by to 18.4 per cent post issue, its managing director and chief executive Sarma told PTI here.

Oman India Joint Investment Fund II is the single largest external shareholder in the bank, with a 9.5 per cent stake, which will sell its 20 per cent or 8,36,728 shares of its pre-issue holding.

External investors own 40 per cent of the bank. American Capital, which owns 5 per cent, will divest 10 per cent or 1,51,153 equity shares, and Amicus Capital Private Equity will be selling 5,55,904 shares.

External shareholders, who are not paring stake through the OFS, include PI Ventures (5 per cent), HDFC Life, ICICI Prudential Life, Sidbi (4 per cent each) and Max Life, which holds 3 per cent.

NRIs and some individuals own 20 per cent each in the bank and will not participate in the OFS, its executive director Munish Jain told PTI.

The total OFS offering is only 15,61,329 shares, he added.

The anchor investor bidding will be on February 6.

It will utilise the proceeds from the fresh issue towards augmenting the tier-I capital base to meet its future capital requirements. As the bank continues to grow its loan portfolio and asset base, it expects to require additional capital.

The bank, which lends only against collateral, has good asset quality with a net bad loans ratio of 1.4. In FY23, its net profit stood at Rs 93 crore, which was Rs 53 crore in the first half of the current fiscal, Jain said.

The bank offers fully secured loans to MSMEs, mortgages and farmers.