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The IPO of Asirvad Micro Finance Ltd consists of an entirely fresh issue with no offer for sale. The fresh issue of equity shares of face value of ₹10 each aggregates up to ₹1500 crore. The issue size of this IPO is also pegged at ₹1500 crore. The IPO is a 100% book-built offer.
The company plans to use the proceeds received from the IPO to augment its capital base and meet future business requirements.
Detail | Information |
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Upper Price Band | TBA |
Fresh Issue | Up to ₹1500 crore |
Offer for Sale | NA |
EPS in ₹ for FY 23 | 12.84 |
Investor Category | Shares Offered |
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QIBs | Not less than 75% of the issue |
Non-institutional Bidders | Not more than 15% of the issue |
Retail Individual Bidders | Not more than 10% of the issue |
With economic revival and unmet demand in rural regions, CRISIL MI&A Research expects the overall microfinance industry (MFI) portfolio size to reach ₹ 5451 billion by the end of fiscal 2026. CRISIL MI&A Research expects the MFI industry to log a 16% CAGR between fiscal 2023 and fiscal 2026.
Asirvad Micro Finance Ltd is a non-banking finance company MFI offering microfinance loans to low-income women. The company is the third-largest MFI in India in terms of assets under management (AUM) as of March 31, 2023 with microfinance loans comprising 92.59% of its AUM.
Largest and Most Diversified MFI in Terms of Geographical Spread, with Lowest Concentration Among Top Three States
Asirvad Micro Finance Ltd is the largest MFI in India in terms of geographic coverage as of March 31, 2023, with a presence in 450 districts in 22 states and four union territories. As of June 30, 2023, its microfinance loan portfolio had a presence in 395 districts across India.
Third-largest MFI in Terms of AUM, With Scalable Operations, Well-positioned to Capture Industry Tailwinds and Controlled Ticket Sizes Compared to Peers
As of March 31, 2023, the company is the third-largest MFI in India in terms of AUM. As of March 31, 2023, its AUM was ₹10040.893 crore, with 92.59% of its AUM attributable to microfinance loans.
Low-cost Liability Franchise, Backed by Diverse Borrowing Mix and Lender base; First NBFC-MFI to be Rated AA- by a credit Rating Agency
The company’s ability to access diversified sources of funding is a key contributor to its growth. In fiscal 2023, the company had the second lowest cost of borrowings among the MFI Peer Group in India. In Fiscal 2021, 2022, 2023 and in the three months ended June 30, 2022 and June 30, 2023, its average cost of borrowing was 9.97%, 11.20%, 9.01%, 2.59% and 2.65%, respectively.
Non-payment or default owing to the profile of borrowers in the microfinance industry, whom it services, may lead to increased levels of non-performing assets, related provisions and write-offs that may adversely affect its business, results of operations, cash flows and financial condition.
The quality of its portfolio may be impacted due to higher levels of non-performing assets (NPAs) and its business may be adversely affected if it’s unable to create adequate provisions for such higher levels of NPAs.
The company’s business is vulnerable to interest rate risk. Volatility in interest rates for both lending and treasury operations could have an adverse effect on its net interest income and net interest margin, thereby affecting its results of operations and cash flows.
Particulars (in Rs. crore)
Particulars (in Rs. crore)
Parameter | Asirvad Micro Finance Ltd | CreditAccess Grameen Ltd | Fusion Micro Finance Limited | Satin Creditcare Network Limited | Spandana Sphoorty Financial Limited | Bandhan Bank Limited | Ujjivan Small Finance Bank Limited | Utkarsh Small Finance Bank Limited | Suryoday Small Finance Bank Limited |
---|---|---|---|---|---|---|---|---|---|
Total Revenue (in ₹ crore) for FY 23 | 1759.276 | 3550.760 | 1799.970 | 1761.545 | 1394.453 | 18373.250 | 4751.190 | 2804.286 | 1281.10 |
P/E for FY 23 | NA | 24.90 | 13.85 | 7.15 | 436.24 | 18.56 | 8.40 | 11.10 | 21.70 |
Return on Net Worth for FY 23 in % | 14.47 | 16.17 | 16.67 | 13.81 | 0.41 | 11.2 | 26.1 | 20.2 | 4.9 |
EPS in ₹ (Basic) for FY 23 | 12.84 | 52.04 | 43.29 | 33.79 | 1.74 | 13.62 | 5.88 | 4.52 | 7.32 |
Link Intime India Private Limited is the registrar of Asirvad Micro Finance Ltd IPO. The book running lead managers of the IPO are:
The company offers microfinance loans, loan against gold, MSME loans. The company’s AUM as of June 30, 2023 stood at ₹ 10140.576 crore, of which microfinance loans comprised ₹9310.447 crore, and loans against gold comprised ₹789.577 crore. As of June 30, 2023, the company had 1,415 active borrowers in its MSME loan portfolio.
Over the years, the company has rapidly scaled its operations while maintaining its asset quality. Its AUM has grown from ₹5984.618 crore as of March 31, 2021 to ₹7002.183 crore as of March 31, 2022 and further to ₹10040.893 crore as of March 31, 2023, at a CAGR of 29.53% between fiscal 2021 and fiscal 2023.
Asirvad Micro Finance Ltd is the largest MFI in India in terms of geographic coverage as of March 31, 2023. It’s also the third-largest MFI in India in terms of assets under management AUM as of March 31, 2023.
Parameter | FY 23 | FY 22 | FY 21 |
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Total Income (in ₹ crore) | 1759.276 | 1411.890 | 1077.185 |
EBITDA (in ₹ crore) | 974.744 | 627.492 | 499.168 |
EPS in ₹ | 12.84 | 0.87 | 1.01 |
Parameter | FY 23 | FY 22 | FY 21 |
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Net Cash Generated / used in operating activities (in ₹ crore) | (2384.934) | (150.234) | (267.554) |
Net Cash Generated / (Used) in Investing Activities (in ₹ crore) | (317.486) | (67.427) | 43.366 |
Net Cash Generated / (Used) from Financing Activities (in ₹ crore) | 2459.828 | 314.706 | (281.088) |
Cash and Cash Equivalents as at the End of the Year/ Period (in ₹ crore) | 549.921 | 792.513 | 695.468 |
You can check the allotment status of shares either on the website of the Bombay Stock Exchange (BSE) or on the website of the registrar - Link Intime India Private Limited. To check the status on the BSE website:
To check status on the website of Link Intime Private Ltd:
Here are the steps to apply for Asirvad Microfinance Ltd IPO:
Step 1: Log in to your Kotak Securities Demat account Log in to your Demat account to access IPO investments. Next, select the current IPO section.
Step 2: Specify IPO details Enter the number of lots and the price you wish to apply for.
Step 3: Enter UPI ID After entering your UPI ID, click submit. This will place your bid with the exchange.
Step 4: Mandate Notification Your UPI app will receive a mandate notification to block funds.
Step 5: Approve Request Your funds will be blocked once you approve the mandate request on your UPI.
This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
The Asirvad Micro Finance Ltd IPO consists entirely of a fresh issue of equity shares. The issue size of the IPO is pegged at ₹1500 crore. It’s a 100% book-built offer with no offer for sale.
The exact dates of the IPO are not yet known. However, it’s expected to go live soon.