IPO Details
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IPO Size
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Schedule of Fincare Small Finance Bank IPO
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End date
Allotment of bids
Refund Initiation
Listing on exchange
About Fincare Small Finance Bank Ltd IPO
The IPO of Fincare Small Finance Bank Ltd is a 100% book-built issue. It consists of a fresh issue and an offer for sale. The fresh issue aggregates up to ₹625 crore, while the offer for sale is up to 17,000,000 equity shares.
Objectives of Fincare Small Finance Bank Ltd IPO
The net proceeds are proposed to be utilised towards augmentation of the bank’s Tier-I capital base to
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meet the bank’s future capital requirements which are expected to arise out of growth of the bank’s assets, primarily its loans/advances and investment portfolio and
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to ensure compliance with regulatory requirements on capital adequacy prescribed by the RBI from time to time.
Fincare Small Finance Bank Ltd Valuation
| Detail | Information |
|---|---|
Upper Price Band | TBA |
Fresh Issue | Up to ₹625 crore |
Offer for Sale | Up to 17,000,000 equity shares |
EPS (Basic) in ₹ for FY 23 | 4.69 |
Fincare Small Finance Bank Ltd IPO Offer and Subscription Details
| Investor Category | Shares Offered |
|---|---|
QIBs | Not more than 50% of the offer |
Non-institutional Bidders | Not less than 15% of the offer |
Retail Individual Bidders | Not less than 35% of the offer |
Industry Outlook
Small Finance Banks’ (SFB) AUM is estimated to have clocked 29% CAGR from Fiscal 2018 to Fiscal 2023. CRISIL MI&A expects the loan portfolio to see a strong CAGR of approximately 22% between Fiscal 2023 and Fiscal 2025 as most SFBs have completed the transition phase and are likely to benefit from the operating leverage.
Company Information
Fincare Small Finance Bank Ltd is a digital-first SFB with a focus on unbanked and under-banked customer segments especially in rural and semi-urban areas. The bank follows a business model focused on financial inclusion and aims to provide individuals and businesses with affordable financial products and services that meet their needs.
Its business objective is to enhance access to savings, credit and other financial products for unbanked and underbanked individuals, MSMEs and unorganised entities, especially in rural areas, by leveraging technology and last-mile distribution.
Fincare Small Finance Bank Strengths
Customer-centric approach driven by digital banking and automation
The bank follows a customer-centric business model, focused on financial inclusion. It aims to provide individuals and businesses with affordable financial products and services that meet their needs. It’s a "digital-first" bank and has been an early adopter of scalable digital solutions in order to improve customer experience and/or operational efficiencies.
The company deploys a wide variety of digital solutions for their frontline-staff, including solutions for customer onboarding, savings account and term deposit opening, funds transfer, bill payment, service requests, account changes, collections (m-serve for microloans) , cross-selling among others. They also offer customer service through multiple digital channels, including internet banking, mobile banking application, WhatsApp messenger service and their payments applications, such as BillPay, NEFT, RTGS, IMPS, NACH, netbanking, UPI and debit cards.
Strong commitment to financial inclusion with extensive rural franchise and expanding urban presence
Financial inclusion is at the core of the bank’s business and its objective is to enhance access to products such as savings accounts, microloans, loans against gold, insurance and investment products for unbanked and underbanked individuals, MSMEs and unorganised entities through high-tech, low-cost operations. As a majority of its customers are individuals from low-income groups and lack financial sophistication, it has designed its products in a manner such that they are simple to understand, which contributes to their popularity with customers.
Further, it has a deep rural franchise and experience of over 15 years in microfinance. As of March 31, 2023, it has covered 57,186 villages, with 2,757,621 base-of-pyramid households and 2,720,822 rural savings accounts.
Multi-channel, low-cost distribution network with diversified geographic presence
The bank reaches its customers through a diversified, extensive multi-channel network combining traditional brick-and-mortar banking outlets and digital banking. It believes this allows it to offer "last mile, doorstep connectivity" to its customers while maintaining low operating costs.
As of March 31, 2023, the bank had a pan-India network of 1,231 banking outlets (including 373 business correspondent outlets) and 144 ATMs of which 92 were cash recyclers, spread across 19 states and three union territories, covering 338 districts, which together covered over 57,186 villages and reached 4.27 million customers.
Fast-growing stable deposit base with a growing CASA franchise
As of March 31, 2023, the bank had 5.68 million deposit accounts (including 0.43 million 101 accounts), representing a CAGR of 182.31% since March 31, 2021, covering both existing microloan customers and new-to-bank customers, especially in urban areas. As of March 31, 2023, the bank had 3.85 million deposit customers, representing a CAGR of 377.87% since March 31, 2018.
Risks of Fincare Small Finance Bank Ltd IPO
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25% of its total banking outlets are required to be located in unbanked rural areas. If the bank is unable to effectively manage the growth associated with its expansion, its financial, accounting, administrative and technology infrastructure, as well as its business and reputation could be adversely affected.
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The bank’s gross loan portfolio consists primarily of microloans, which comprised 60.99% of its gross loan portfolio as of March 31, 2023. These loans are generally unsecured, without support from collaterals and contribute to its gross NPAs. The bank significantly depends on its microloan business, which has its own unique risks and, as a result, it may experience increased levels of non-performing loans and related provisions and write-offs that materially adversely affect its business, financial condition, results of operations, cash flows and prospects.
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A significant portion of the bank’s loan portfolio originated in rural areas, exposing it to risks associated with rural economies.
Comparison with peers
Parameter as of FY 23
Total Income (in ₹ crore)
Fincare Small Finance Bank Ltd
1644.737
Equitas Small Finance Bank Ltd
3997.226
Ujjivan Small Finance Bank Ltd
3172.690
Credit Access Grameen Ltd
2750.130
Spandana Sphoorty Financial Ltd
1480.035
Bandhan Bank Ltd
16693.943
AU Small Finance Bank Ltd
6915.425
Suryoday Small Finance Bank Ltd
1035.380
Parameter as of FY 23
Return on Net Worth (in %)
Fincare Small Finance Bank Ltd
0.8
Equitas Small Finance Bank Ltd
6.61
Ujjivan Small Finance Bank Ltd
(16.19)
Credit Access Grameen Ltd
8.98
Spandana Sphoorty Financial Ltd
2.25
Bandhan Bank Ltd
0.72
AU Small Finance Bank Ltd
15.04
Suryoday Small Finance Bank Ltd
(6.41)
Parameter as of FY 23
Basic EPS in ₹
Fincare Small Finance Bank Ltd
4.69
Equitas Small Finance Bank Ltd
2.43
Ujjivan Small Finance Bank Ltd
(2.40)
Credit Access Grameen Ltd
(23.31)
Spandana Sphoorty Financial Ltd
10.75
Bandhan Bank Ltd
0.78
AU Small Finance Bank Ltd
18.03
Suryoday Small Finance Bank Ltd
(8.76)
| Parameter as of FY 23 | Fincare Small Finance Bank Ltd | Equitas Small Finance Bank Ltd | Ujjivan Small Finance Bank Ltd | Credit Access Grameen Ltd | Spandana Sphoorty Financial Ltd | Bandhan Bank Ltd | AU Small Finance Bank Ltd | Suryoday Small Finance Bank Ltd |
|---|---|---|---|---|---|---|---|---|
Total Income (in ₹ crore) | 1644.737 | 3997.226 | 3172.690 | 2750.130 | 1480.035 | 16693.943 | 6915.425 | 1035.380 |
P/E | NA | 29.10 | NA | 42.68 | 54.70 | 282.76 | 37.37 | NA |
Return on Net Worth (in %) | 0.8 | 6.61 | (16.19) | 8.98 | 2.25 | 0.72 | 15.04 | (6.41) |
Basic EPS in ₹ | 4.69 | 2.43 | (2.40) | (23.31) | 10.75 | 0.78 | 18.03 | (8.76) |
IPO Registrar and Book Running Lead Managers
KFin Technologies Ltd is the registrar of Fincare Small Finance Bank Ltd IPO. The book running lead managers are ICICI Securities Ltd, IIFL Securities Ltd and Ambit Pvt Ltd.
Business Model
The bank’s asset products include microloans, loans against property, loans against gold, two-wheeler loans, affordable housing loans and institutional finance. Its suite of deposit products comprises term deposits, recurring deposits, current accounts and savings accounts.
Bank Growth Trajectory
The bank’s total income grew from ₹1376.710 crore in FY 21 to ₹1970.796 crore in FY 23. Its total assets increased from ₹7967.073 crore in FY 21 to ₹12467.692 crore in FY 23.
Market Position
A digital first SFB, Fincare Small Finance Bank Ltd has an extensive network of 1,231 banking outlets (including 373 business correspondent outlets) and 144 ATMs (of which 92 are cash recyclers) spread across 19 states and three union territories, covering 338 districts and 57,186 villages, which reached 4.27 million customers, as of March 31, 2023. As of December 31, 2022, it had the second highest number of functioning offices in India among SFBs.
Fincare Small Finance Bank Ltd Key Financials
Here are the key financials for Fincare Small Finance Bank Limited:
Particulars (in Rs. Crore)
Particulars (in Rs. Crore)
Fincare Small Finance Bank Ltd Cash Flow Statement
| Parameter | FY 23 | FY 22 | FY 21 |
|---|---|---|---|
Profit Before Tax (in ₹ crore) | 129.968 | 5.746 | 146.419 |
Net Cash Generated (Used in) / from Operating Activities (in ₹ crore) | (56.073) | (1388.752) | 338.462 |
Net Cash Generated /(Used in) from Investing Activities (in ₹ crore) | (223.590) | (281.251) | (303.160) |
Net Cash Generated / Used in from Financing Activities (in ₹ crore) | (159.544) | 1712.815 | 32.267 |
Cash and Cash Equivalents at the End of the Year (in ₹ crore) | 746.437 | 1185.644 | 1142.832 |
How to Check the Allotment Status of Small Finance Bank Ltd IPO?
You can check the allotment status of Small Finance Bank Ltd IPO through the BSE website or through the registrar’s portal. To know the status from the BSE website:
- Visit the BSE website
- Click on “Investor Services” and choose “Application Status Check”
- Choose the issue type — Equity or Debt
- Select the Issue Name from the drop-down.
- Enter your application number or PAN number
- Check the box that says “I’m not a Robot” and click on “Search” to know the allotment status
To check status through registrar’s portal:
- Visit the website of KFin Technologies Ltd
- Choose IPO allotment status from Products’ dropdown
- Click on any of the links
- Select the IPO
- Input either your application number, PAN number or Demat number
- Enter captcha and click on Submit
How To Apply for Fincare Small Finance Bank Ltd IPO?
Here are the steps to apply for Fincare Small Finance Bank 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.
Opening of account will not guarantee allotment of shares in IPO. Investors are requested to do their own due diligence before investing in any IPO.
Fincare Small Finance Bank IPO FAQs
What is the Fincare Small Finance Bank Limited IPO?
The Fincare Small Finance Bank Limited IPO has an issue size of Rs. 625 crores. The IPO opens for subscription on xx Month 2024 and closes on xx Month 2024.
Who is the Registrar for Fincare Small Finance Bank Limited IPO?
Kfin Technologies Limited is the registrar for this IPO.
Where can I read more about Fincare Small Finance Bank Limited’s business?
You may read more about Fincare Small Finance Bank Limited and its IPO from the company’s draft red herring prospectus (DRHP) here:
