ESAF Small Finance Bank are among India’s leading small financing banks, in terms of the customer base size, yield on advances, Net Interest Margin, assets under management CAGR, overall deposit CAGR, loan portfolio concentration in agricultural and semi-urban regions, and ratio of micro loan advances to total loans. In August 2021, the ESAF Small Finance Bank IPO will hit the market.
Table of Contents
About
ESAF Small Finance Bank have a history of more than 25 years of predominantly helping the unserved and disadvantaged, with an emphasis on financial inclusion, thanks to their Promoters. We must devote at least 75.00 percent of our adjusted net bank credit to priority industries as a small finance bank.
Their business strategy is based on the principles of accountable banking, with a focus on customer-centric products and services delivered via the use of technology.
They had 550 offices, 421 client service centres (which are managed by their business correspondents), 12 business correspondents, 158 banking representatives, and 327 ATMs as of May 31, 2021, serving over 4.68 million clients in 21 states and two union territories.
Business Model
They pursue a triple bottom line effect through a social business approach that focuses on people, the environment, and wealth.
They think that their company’s social, environmental, and economic outcomes generate synergies that benefit all of our stakeholders.
Their bank was founded on the heritage of a commitment to combat prosperity partiality (i.e., the push for inclusion of marginalised sectors of society, equitable distribution of wealth, and equity of opportunity).
Their aim is to be India’s foremost social bank, providing equitable opportunities for all via universal financial inclusion, as well as livelihood and economic growth.
Deposits
Current accounts, savings accounts, term deposits, and recurring deposits are among their liabilities products. NRI clients are also addressed to, with NRE and NRO current accounts, savings accounts, term deposits, and recurring deposits available.
As to March 31, 2021, 2020, and 2019, their total deposits were 89,994.26 million, 70,283.82 million, and 43,170.08 million, respectively.
Among their comparable peers, they achieved the second largest deposit growth throughout Fiscals 2019-21 and the highest share of retail deposits as a percent of overall deposits as of Mar 31, 2020.
As of March 31, 2021, 2020, and 2019, their retail deposits accounted for 97.74 percent, 95.08 percent, and 92.43 percent of their total deposits, respectively.
ESAF Small Finance Bank IPO
ESAF Small Finance Bank, headquartered in Kerala has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of 997.78 Crore on 24 July, 2021.
There will be fresh issue of 800.00 Crore & OFS (Offer for sale) up to 197.78 value equity shares from existing Promoters mentioned in the DRHP of the company.
They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market. They will try lunch the ipo as soon as they will get the approval as RBI has given them deadline of 31st July 2021
Pre- IPO Placement
As per the initial prospectus, the firm may contemplate offering equity shares on a private placement basis for cash consideration, collecting up to INR 3 billion as a pre-IPO placement.
ESAF Small Finance Bank received INR 1.62 billion in April through a preferential offering of 21.8 million equity shares at INR 75 each, resulting in a 5% ownership reduction.
Financials Trends
| Particulars | For the year/period ended ( in Cr.) | ||||
|---|---|---|---|---|---|
| 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |||
| Total Assets | 12,338.65 | 9,469.97 | 7,058.41 | ||
| Total Revenue | 1,767.28 | 1,546.44 | 1,140.79 | ||
| Profit After Tax | 105.40 | 190.39 | 90.28 | ||
Basic and Diluted Earnings Per Share (EPS)
| Financial Period | Basic EPS (in INR) | Diluted EPS (in INR) | Weight |
| Financial Year 2019 | 2.37 | 2.37 | 1 |
| Financial Year 2020 | 4.45 | 4.45 | 2 |
| Financial Year 2021 | 2.46 | 2.46 | 3 |
| Weighted Average | 3.11 | 3.11 |
Objects of the Issue
- Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
- To meet common corporate objectives.
Basis of The offer
They feel that they can compete effectively in the industry because of the following company strengths:
- They have a deep expertise of the microfinance sector, which has allowed them to expand their business outside their native state of Kerala.
- Banking franchise with a strong rural and semi-urban presence.
- Retail deposit portfolio that is rapidly increasing and has a low concentration risk.
- Customer-centric solutions and procedures, as well as other non-financial services for micro loan clients, have helped them build strong customer relationships.
- With a sophisticated information technology platform, this is a technology-driven business.
- Experienced members of the Board of Directors and senior management positions.
ESAF Small Finance Bank IPO Peer Comparison
| S. No. | Company Name | PE |
| 1 | Suryoday Small Finance Bank Limited | 160.61 |
| 2 | Credit Access Grameen Limited | 80.44 |
| 3 | Spandana Sphoorty Financial Ltd | 31.92 |
| 4 | Bandhan Bank Limited | 23.40 |
| 5 | Ujjivan Small Finance Bank Limited | 634.00 |
| 6 | Equitas Small Finance Bank Limited | 19.16 |
ESAF Small Finance Bank IPO Details
| IPO Opening Date | August 2021 |
| IPO Closing Date | August 2021 |
| Issue Type | Book Built |
| Face Value | 10 per share |
| IPO Price | 0 per equity share |
| Market Lot | 0 |
| Min Order Quantity | 0 |
| Listing At | BSE, NSE |
| Issue Size | 997.78 Cr. |
| Fresh Issue | 800.00 Cr. |
| Offer for Sale | 197.78 Cr. |
ESAF Small Finance Bank IPO Dates
ESAF Small Finance Bank IPO opening date is August 2021, and the closing date August 2021. The issue may list in August 2021.
| IPO Open Date | August 2021 |
| IPO Close Date | August 2021 |
| Basis of Allotment Date | August 2021 |
| Initiation of Refunds | August 2021 |
| Credit of Shares to Demat Account | August 2021 |
| IPO Listing Date | August 2021 |
Basis of Allotment
| Type | % of Offer | Basis of Allotment |
|---|---|---|
| Qualified Institutional Buyer | 50 |
Roughly
equivalent
|
| Non Institutional Investor | 15 |
Roughly
equivalent
|
| Retail | 35 | Minimum level of 1 lot, based on availability, for every shareholder. |
ESAF Small Finance Bank IPO Allotment Status
Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.
Here, you can find the Allotment Status of ESAF Small Finance Bank IPO.
ESAF Small Finance Bank IPO GMP ( ESAF SFB IPO GMP)
ESAF Small Finance Bank IPO Grey Market Premium is INR 0.
| Date | GMP (in Rs) | Subject to Sauda | Kostak (in Rs) |
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 | |||
| August 2021 |
ESAF Small Finance Bank IPO Review
ESAF Small Finance Bank IPO Review will depend on Price band. Once the price band will be issued we will update the Review for this IPO.
ESAF Small Finance Bank IPO Risk
- COVID-19 has had and may continue to have a negative impact on their company.
- Their company is now heavily reliant on micro loans, and any negative developments in the microfinance sector might have a negative impact on them.
- A large portion of their loans are unsecured. The business may suffer if they are unable to reclaim these advances in a timely or consistent way.
- They have considerable operational expenditures, and any rise in these expenses without a commensurate increase in revenue will have a negative impact on their business.
- They are bound by strict regulatory and prudential standards. If they are unable to meet their requirements, it may have a negative impact on their business.
Other Threats
- Interest rate instability may have an influence on them, causing their Net Interest Margin to drop and negatively impacting their business.
- Company and their promoters are involved in a number of legal processes, the outcome of which might have a negative impact on their company.
- Their Individual Promoter is currently the subject of a criminal investigation.
- The RBI may impose different fines and penalties if they fail to meet with the obligation to list the Equity Shares on an Indian stock market by July 31, 2021.
- It might have a substantial negative impact on their business if they are unable to get finance on suitable terms and at competitive prices when they require it.
ESAF Small Finance Bank IPO Brokerage views
- Yes Securities : Not Updated
- Choice Brokering: Not Updated
- Axis Securities: Not Updated
- IIFL Securities: Not Updated
- Trade swift: Not Updated
- Anand Rathi : Not Updated
- ICICI Securities: Not Updated
ESAF Small Finance Bank IPO Subscription Status
| Date | Day | QIB | NII | Retail | Employees | Total Subscription |
| August 2021 | 1 | |||||
| August 2021 | 2 | |||||
| August 2021 | 3 |
Promoters
- Mr. Kadambelil Paul Thomas
- ESAF Financial Holdings Private Limited
Promoters Holding
| Pre Issue Share Holding | 69.40% |
| Post Issue Share Holding |
ESAF Small Finance Bank IPO Prospectus
ESAF SFB IPO Contact Details
Esaf Small Finance Bank Limited
Building No.VII/83/8, ESAF Bhavan, Thrissur-Palakkad National Highway,
Mannuthy, Thrissur 680 651, Kerala, India
Telephone: +91 487 7123 907
E-mail: [email protected]
Website: www.esafbank.com
ESAF SFB IPO Registrar
Link Intime India Private Limited
C-101, 1st Floor, 247 Park, Lal Bahadur Shastri Marg,
Vikhroli (West) Mumbai 400 083 Maharashtra
Tel: (+91 22) 4918 6200
E-mail: [email protected]
Website: www.linkintime.co.in
ESAF SFB IPO Lead Manager(s)
- Axis Capital Limited
- Edelweiss Financial Services Limited
- ICICI Securities Limited
- IIFL Securities Limited
We hope we are able to answer all your questions about ESAF Small Finance Bank IPO. If you don’t have a Demat account, open it now with Zerodha best trading app.
Clarification
The reference of IPO Grey Market Premium (IPO GMP) is only valid for the date specified in the header.
On the IPO Grey Market, we do not purchase or sell IPO forms.
The Kostak Rate is the profit earned by selling an IPO application (in an off-market transaction) to somebody else before the issue is allotted or listed.
Do not subscribe to an IPO based solely on the premium price, as it may alter at any time before to the listing. Only consider the fundamentals of the companies when subscribing.
The GMP rates for IPOs are based on market intelligence. Please keep in mind that these IPO GMP rates may vary by geography and market.
Note:
We do not engage in grey market trading or facilitate the purchase or sale of IPO forms.
What is grey Market Premium?
The Grey Market Premium, or GMP, is the price at which IPO stock shares are exchanged in the grey market.
This could be correct or incorrect, implying that the grey market trading price is greater or cheaper than the issue price, depending on demand and supply for the stocks.
Typically, individuals who do not want to incur the risk of their shares not being allocated through an IPO can purchase shares on the grey market in the hopes of flipping them on the IPO for a profit.
Kostak rate
The Kostak rate is the fee received by an investor who sells his or her IPO application on the grey market. Regardless of allotment status, this is the money an individual stands to gain.
Subject to Sauda
The money that an investor stands to gain by selling his or her application for firm allotment is referred to as the subject to Sauda. Firm allocation is the important operative phrase here. The sauda will be cancelled if the applicant is not allotted.
When selling an IPO application in the grey market, the client and seller agree that the sale will only be legal if the seller receives the allocation. The deal is avoided if the seller does not get any stocks throughout the IPO procedure.
FAQ
ESAF Small Finance Bank IPO Opening Date?
ESAF Small Finance Bank IPO will open in August 2021.
ESAF Small Finance Bank IPO Listing Date?
ESAF Small Finance Bank IPO will list in August 2021.
ESAF Small Finance Bank IPO GMP Today?
ESAF Small Finance Bank IPO Grey Market Premium is INR 0.
ESAF Small Finance Bank IPO Allotment Date?
ESAF Small Finance Bank IPO basis of allotment will be in August 2021.
Lot size for ESAF Small Finance Bank IPO?
Lot size for ESAF Small Finance Bank IPO is 0.
