The Fincare Small Finance Bank has postponed its IPO once due to the COVID 19 pandemic and the high volatility of the stock market as a result of the conflict between Russia and Ukraine. The managing director and CEO of the bank, Rajeev Yadav has said that the bank was forced to postpone the IPO. He also said that the bank is aiming to go public as soon as possible.
SFB filed a draft red herring prospectus with market regulator SEBI to raise funds with an IPO. It is aiming to raise Rs 1,330 crore through the offer which includes a fresh issue of Rs 330 crore bank and an offer for the sale of Rs 1,000 crore by Fincare Business Services.
According to guidelines of the Reserve Bank of India (RBI) for tap licensing of SFB in the private sector, SFB must be listed within three years after its net worth reaches Rs 500 crore. Fincare SFB began operations on July 21, 2017, with a total loan portfolio of Rs 6,072 crore and deposits of Rs 5,318 crore as of March 31, 2021.
Once the bak is listed, the promoter stake will fall down by 10-25% depending on the dilution methodology. Currently, Fincare Business Services hold 78.4% in the small finance bank.
The CEO also said that several payments banks have been eyeing a small finance bank licence and when asked if this would post a competitive challenge to the growth plans of Fincare SFB. He also said that the Indian credit market is more than Rs 130 lakh crore and players with Rs 5,000 crore or Rs 10,000 crore of balance sheets do not make a significant impact.