Fincare Small Finance Bank files Rs 1,330-crore IPO papers with SEBI

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New Delhi: Digital lender Fincare Small Finance Bank has filed preliminary papers with capital market regulator Sebi to raise Rs 1,330 crore through an initial share-sale.

The initial public offer (IPO) comprises a fresh issue of equity share of the bank worth Rs 330 crore and an offer for sale aggregating up to Rs 1,000 crore by promoter Fincare Business Services Limited, according to the Draft Red Herring Prospectus (DRHP).

This offer includes a reservation for subscription by employees. The bank would utilise net proceeds from the fresh issue towards augmenting its Tier-1 capital base to meet future capital requirements. Further, a small portion of the proceeds will be used towards meeting the expenses in relation to the offer.

Under the terms of the RBI final approval and the small finance bank (SFB) licensing guidelines, the lender is required to list its equity shares on the stock exchanges within a period of three years from reaching a net worth of Rs 500 crore. The Bengaluru-based MFI-turned small finance bank started operations in July 2017.

Before converting into a small finance bank, Fincare Small Finance Bank largely conducted business from two entities – Disha Microfin focused on the western region and the south-focused Future Financial Services.

On May 3, Motilal Oswal Private Equity (PE) announced that it has picked up a minority stake in Fincare Small Finance Bank through a secondary acquisition worth around Rs 185 crore ($25 million).

The investment was through India Business Excellence Fund-III, a fund managed and advised by Motilal PE. ICICI Securities, Axis Capital, IIFL Securities, SBI Capital Markets and Ambit Private Limited have been appointed as merchant bankers to advise the SFB on the IPO. The equity shares of the lender will be listed on BSE and NSE.