Suryoday Small Finance Bank raises Rs 160 crore

TVS capital invests Rs 60 crore, two investors get RBI nod to hold more than 5 %

Suryoday Small Finance Bank Limited (SSFB) has raised Rs 160 crore in the last one week from existing and new investors, including TVS Capital. It plans to list the new bank in the next three years.

The fund raising will support company's investment plan in technology and increase its networks. Of this, fund raising of Rs 100 crore was through a rights issue.

R Baskar Babu, managing director and chief executive officer, SSFB, said existing investors including Sarva Capital, HDFC, IFC, IDFC Bank and others have participated in the fundraising.

The new investor which came on board today was TVS Capital with its investment Rs 60 crore for five per cent stake.

Babu added that the Reserve Bank of India (RBI) has given special approval for a few investors to hold over five per cent in SSFB.

The investors include Sarva Capital (which will hold 9.5 per cent), International Finance Corporation (6.8%).

Post the issue, while promoter group shareholding will increase to 26.2 per cent from 26.1 per cent, other domestic investors will be increased to 27.6 per cent from 25.4 per cent. However, foreign investors holding will be decreased to 46.3 per cent from 48.5 per cent.

Babu said that currently Suryoday has four bank branches and 226 micro-finance branches and by end of 2017-2018, the number of bank branches will be increased to 300 including the conversion of existing MFI branches.

The new SSFB plans to invest around Rs 100 crore in technology over the next years, while it will invest around Rs 10 crore in bank branches by next year. It currently has 7.5 lakh customers.

With the additional infusion, Suryoday's networth has increased to Rs 510 crore from Rs 350 crore and Babu said the new SSFB will go to IPO before March 31, 2020. The focus and major thrust area will be retail for the Bank, said Babu.

Other challenges would be human resources and balancing of cost, said Babu. Its focus will be on three states — Maharashtra, Tamil Nadu and Odisha — though it is present in seven states at present.