IPO Alert: Ujjivan Small Finance Bank files papers with SEBI for Rs. 12 bn issue

IPO Alert: Ujjivan Small Finance Bank files papers with SEBI for Rs. 12 bn issue

AgenciesUpdated: Thursday, October 31, 2019, 01:15 PM IST
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Mumbai - Ujjivan Small Finance Bank has filed a draft red herring prospectus with the Securities & Exchange Board of India for its proposed initial public offering, the bank said in a release. The bank aims to raise 12 bln rupees from the issue.

Microfinance lender Ujjivan Financial Services is the holding company of the small finance bank.

The proceeds of the issue will be used to augment the company's capital base to meet future requirements.

The filing for the IPO comes at a time when the bank is moving close to the timeline for cutting promoter stake in the bank and that for getting shares of the bank listed.

As per small finance bank licensing norms, Ujjivan Small Finance Bank has to list its shares by January 2020, and bring down promoter stake to 40% by January 2022.

This issue of listing the small finance bank separately and cutting promoter stake has been an issue for almost all small finance banks, with many seeking Reserve Bank of India's approval to merge the entities that would enable meeting both norms in one go. However, the RBI has not been receptive to this, which means small finance banks have had to look at listing of their shares.

As per the offer document, up to 1.2 bln rupees of the share issue is reserved for eligible shareholders for Ujjivan Financial Services Ltd. The face value of the shares on offer is 10 rupees each.

The bank may also consider a pre-issue placement of shares of up to 3 bln rupees. In case such a pre-IPO placement happens, then the size of the share issue will shrink by the amount raised.

The bank has appointed Kotak Mahindra Capital Co Ltd, IIFL Securities Ltd, and JM Financial Ltd as book running lead managers of the issue.

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