Last year, in November, Capital Small Finance Bank (CSFB) had filed DHRP for an IPO with market regulator SEBI, which includes a Rs 450 crore share issue and an offer for sale of up to 3.84 million shares by Amicus Capital Pvt Equity I LLP and others. Today, the bank gets SEBI nod to float the IPO. SEBI’s remark entails that it has given the go-ahead to conduct an IPO.
According to the DRHP, the offer for sale (OFS) will witness the offloading of 3.37 lakh equity shares by PI Ventures LLP, Amicus Capital Private Equity I LLP will offload up to 6.04 lakh equity shares, 70,178 equity shares are to be offloaded by Amicus Capital Partners India Fund I, up to 8.37 lakh equity shares are to be offloaded by Oman India Joint Investment Fund II and lastly, 19.91 lakh equity shares by other shareholders.
The main objective of the issue is to augment the Tier-1 capital base of the bank in order to meet future capital needs. Tier I capital base was Rs 446 crore in June 2021, with a capital to risk (weighted assets ratio) of 21.12%. The issue’s lead managers are Edelweiss Financial Services, Axis Capital Ltd, and SBI Capital Markets.
Capital Small Finance Bank
The Reserve Bank of India (RBI) granted Capital Small Finance Bank scheduled status on February 16, 2017. After converting from Capital Local Area Bank, it began operations on April 24, 2016, as India’s first small finance bank. Since January 14, 2000, it has become India’s largest local area bank. With 47 locations, the bank transitioned from a community bank to a small financing bank. There are now 112 additional branches, bringing the total number of branches to 159. The bank began operations in Punjab and has now extended to Haryana, Rajasthan, Delhi, and the Chandigarh union territory. With approximately 8,47,000 accounts, the Bank’s overall business has surpassed Rs 10,000 Cr. As of September 30, 2021, the Bank did 70% of its business in rural and semi-urban regions, with priority sector lending accounting for 79.08% of Adjusted Net Bank Credit. The Bank generally lends to small business owners. As of September 30, 2021, 64.04 percent of total advances are for up to Rs. 25 lacs in ticket size.