SBFC Finance IPO

A majority of their borrowers are entrepreneurs, small business owners, self-employed people, salaried workers, and members of the working class. They are a strategically essential, non-deposit taking non-banking financial institution (“NBFC-ND-SI”) providing Secured MSME Loans and Loans against Gold. SBFC Finance IPO will hit the stock market in August 2023.

About SBFC Finance

SBFC Finance is one of the strongest asset under management (“AUM”) growth rates among India’s MSME-focused NBFCs, with a CAGR of 40% between Fiscal 2019 and Fiscal 2022. (Source: Report from CRISIL)

Along with strong disbursement growth, between Fiscal 2019 and Fiscal 2022, there was a CAGR of 39%. (Source: Report from CRISIL) The predicted total number of MSMEs in India in July 2022 was 70 million. (Source: Report from CRISIL)

Due to their unregistered status, many MSMEs lack access to organized finance, while just 9.4 million MSMEs have enrolled on UDYAM (Source: CRISIL Report).

In Fiscal 2022, the credit gap was projected to be around USD 85 trillion, providing financial institutions with room to expand. (Source: Report from CRISIL)

Future Growth 

Throughout Fiscal 2022 and Fiscal 2025, the portfolio of secured MSME loans with ticket sizes between 0.50 million and 3.00 million is anticipated to expand at a CAGR of 13% to 15% due to an increase in MSME lenders’ presence in smaller cities and an increased focus on underserved consumers.

In addition, credit has increased in non-metropolitan areas due to increased financial awareness, increased mobile usage, and government initiatives to bring unbanked people into the formal banking system.

Due to the increase in MSMEs enrolled with the Ministry of Micro, Small & Medium Enterprises, from 0.50 million in Fiscal 2016 to 6.11 million in Fiscal 2022, the industry has seen a boost in MSMEs’ access to formal finance. (Source: CRISIL Report)

Network

They have a diverse presence over all of India and a wide network among the people that make up their target market. By June 30, 2022, they will have 135 branches spread across 104 cities in 16 Indian states and two union territories.

They are able to reach underbanked populations in Tier II and Tier III cities in India thanks to their geographically broad distribution network, which is dispersed over the North, South, East, and West zones.

They had the lowest percentage of AUM coming from the biggest state in their portfolio among NBFCs with a concentration on MSME, at 16.76%, illustrating improved diversification. They have been able to maintain low levels of AUM concentration per state despite their growth.

SBFC Finance IPO

SBFC Finance Limited, headquartered in Mumbai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of INR 1025 Crore on 05 October 2022.

The offer includes a fresh issue of INR 600 Crore and there is offer for sale (OFS) of INR 425 Crore by the promoters mentioned in the DRHP. They are looking for Pre-IPO placement of INR 150 Crore in this issue.

They  got approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
	30-Jun-22	31-Mar-22	31-Mar-21	31-Mar-20
Total Assets	4,663.03	4,515.03	4,231.19	4,207.99
Total Revenue	160.12	530.70	511.53	444.85
Profit After Tax	32.07	64.52	85.01	35.50

Basic and Diluted Earnings Per Share

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2020	2.46	2.46	3
Financial Year 2021	1.09	1.06	2
Financial Year 2022	0.49	0.48	1
Weighted Average	0.85	0.83
30 June 2022	0.37	0.36

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

SBFC Finance limited feel that the following business strengths enable them to compete successfully in the industry, and that these factors will be used to calculate the Offer Price:

• A broad network with a diverse presence across all of India to serve our target market.
• With 100% in-house sourcing, you may get better commercial results; you can also apply a comprehensive framework for credit evaluation, underwriting, and risk management.
• Strong physical collection infrastructure resulting in the upkeep of high asset quality.
• Franchise with strong liability and minimal funding costs.
• Dependable financial performance supported by lucrative expansion.
• Strong corporate governance supported by a management team that has experience, has been through a cycle, and is competent.

SBFC Finance Peer Comparison

S. No.	Face Value	Company Name	PE
1	10	Aavas Financiers Limited	47.01
2	2	Home First Finance Company India Ltd	40.22
3	2	Aptus Value Housing Finance India Ltd	40.15
4	10	AU Small Finance Bank Ltd	16.49

1. All financial data for listed industry peers is on a standalone/consolidated basis and comes from the audited consolidated/standalone financial statements of the respective firms for the year ending March 31, 2021, which can be found on the Stock Exchanges’ websites.
2. The P/E ratio is calculated by dividing the closing market price of equity shares on the NSE on October 12, 2022 by the diluted EPS derived from the peer group company’s annual report for the year ended March 31, 2021.

SBFC Finance IPO Details

IPO Opening Date	03 August 2023
IPO Closing Date	07 August 2023
Issue Type	Book Building
Face Value	10 per share
IPO Price	0 to 0 per equity share
Market Lot	–
Min Amount	–
Listing At	BSE, NSE
Issue Size	1025 Crore
Fresh Issue	425 Crore
Offer for Sale	600 Crore

SBFC Finance IPO Date

SBFC Finance Limited IPO opening date is 03 August 2023, and the closing date is 07 August 2023. The SBFC Finance issue may list in 16 August 2023.

IPO Opening Date	03 August 2023
IPO Closing Date	07 August 2023
Basis of Allotment Date	10 August 2023
Initiation of Refunds	11 August 2023
Credit of Shares to Demat Account	14 August 2023
IPO Listing Date	16 August 2023

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	50	Roughly  equivalent
Non Institutional Investor	15	Roughly  equivalent
Retail	35	Minimum 1 lot based on availability

SBFC Finance IPO 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 SBFC Finance IPO.

SBFC Finance IPO GMP

SBFC Finance Limited IPO Grey Market Premium is 35. You can check out GMP of Other IPOs on below Links:

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
27 July 2023	35
August 2023
August 2023
August 2023
August 2023
August 2023
August 2023
August 2023
August 2023
August 2023
August 2023
August 2023

Check Out the GMP of all Other IPOs

IPO Grey Market Premium

SBFC Finance Limited IPO Review

SBFC Finance Limited IPO review will depend on the price band which will be announced after SEBI approval. Whenever it will be announced we will update you regarding review of SBFC Finance IPO is good or bad.

SBFC Finance Limited IPO Risk

• The borrowers’ potential for non-payment or default could have a negative impact on their operations, financial condition, and ability to conduct business.
• They rely on their customers’ and certain third-party service providers’ accuracy and completeness of information, and if they rely on inaccurate or deceptive information, it may affect how they assess their creditworthiness as well as the title to and value of the collateral.
• Their business may suffer if they are unable to promptly appraise and reclaim the full value of the collateral or the sums still owed under defaulted loans.
• Higher levels of NPAs could have an influence on the portfolio’s quality, and if they can’t make provisions for such higher levels of NPAs, their business may suffer.

Other Threats

1. Their industry is particularly susceptible to interest rate risk, and fluctuations in interest rates could negatively affect their net interest income and net interest margin, which would then have an impact on their operating results and cash flows. This could apply to both lending & treasury operations.
2. The COVID-19 has had and might continue to have certain negative effects on their operations, results, cash flow, and financial situation.
3. Any deterioration in their credit ratings could push up borrowing rates, limit their access to credit, and have a negative impact on their operations, cash flow, & financial health.
4. They are governed by laws and regulations, especially those pertaining to capital adequacy ratios, that govern the financial services sector and its operations in India.

SBFC Finance Limited IPO Brokerage views

Once the dates will be announced we will update the views of different brokerage firms regarding this IPO. Here is the views of different stock brokers regarding this SBFC Finance IPO:

• 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

SBFC Finance Limited IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
August 2023	1
August 2023	2
August 2023	3

SBFC Finance Limited Management

Their management team is strong, knowledgeable, & committed, and it includes KMPs with extensive business and industry expertise who have proven they can produce growth & profitability throughout business cycles.

The Key Managerial Personnel is made up of a mix of independent and management executives that have substantial business expertise, which puts them in a good position to take advantage of any future growth prospects.

Each of them has a wealth of experience in banking or fields closely related to it, including finance, business operations, strategy, audit, business development, human resources, compliance, and public relations.

Aseem Dhru, their CEO, previously served as Group Head – Business Banking, Working Capital, and Retail Agribusiness at HDFC Bank. He has more than 25 years of experience.

SBFC Finance Limited‘ Promoters

• SBFC Holdings Pte. Ltd

Promoters Shareholder’s Holding

Pre Issue Share Holding	100.00%
Post Issue Share Holding

SBFC Finance Limited Prospectus