Suryoday Small Finance Bank IPO Review 2021: The Suryoday Small Finance Bank IPO opens on 17th March and closes on 19th March 2021. In this article, we cover the Suryoday SFB IPO review and look into important IPO information and find out the possible prospects of the company. Let’s get started.
Table of Contents
Suryoday Small Finance Bank IPO Review – About the Company
Incorporated in 2008, Suryoday Small Finance Bank is among the leading Small Finance Bank (SFBs) in India.
Before becoming an SFB the Non-Banking Finance Corporation catered to the unbanked and underbanked sections of the population. They only started offering SFB services in 2017.
As of December 2020, the bank had 554 banking outlets which include 153 unbanked rural centers (URCs). Their customer base for the same period stood at 1.44 million.
They also have set up 661 customer service points (CSPs) as additional service from April 2020 and January 2021 and intend to continue expanding their reach
Suryoday SFB beats its other SFB peers in terms of net interest margins, return on assets, yields, and deposit growth. They also have the lowest cost-to-income ratio among Small Finance Banks within India for FY20.
The bank predominantly operates in urban and semi-urban locations due to the greater income earning capabilities and employment opportunities in such areas in comparison to other rural regions.
Suryoday is a commercial bank that considers customers to be the most significant stakeholders. They have set up a strong credit process and a robust risk management framework.
Even though they are relatively new to the sector they have already introduced digital banking aspects and services like ATMs, phone banking, mobile banking, tablet banking, CSPs, and internet banking services.
The Bank loan portfolio stood at Rs 3,900 crore as of December 2020. Microloans formed 70% of these loans. The loans of the banks are concentrated in regions like Maharashtra, Tamil Nadu, and Odisha. These states make up 77% of the bank’s lending businesses.
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Suryoday Small Finance Bank – Key IPO Information
The promoters of the bank are Baskar Babu Ramachandran, P Surendra Pai, P S Jagdish, and G V Alankara. Together they represent 30.35% of the paid-up equity share capital of the bank.
Other investors in the bank include Axis Mutual Fund, ICICI Prudential Life, Two Aditya Birla group companies, SBI Life Insurance Company, Goldman Sachs, IDFC Mutual Fund, HDFC Holdings, Gaja Capital, and Kotak Mahindra Life Insurance.
The offer includes a fresh issue of 81.50 lakh equity shares and an offer for sale of 1.09 crore equity shares by existing investors.
| Particular | Details |
|---|---|
| IPO Size | ₹582.34 Cr |
| Fresh Issue | ₹248.58 Cr |
| Offer For Sale(OFS) | ₹333.76 Cr |
| Opening Date | Mar 17, 2021 |
| Closing Date | Mar 19, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹303 to ₹305 per equity share |
| Lot Size | 49 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | Mar 30, 2021 |
The promoters have appointed Axis Capital, ICICI Securities, IIFL Securities, and SBI Capital Markets as the book running lead managers to the issue. Kfin Technologies has been appointed as the registrar to the issue.
Suryoday Small Finance Bank IPO – Purpose of the IPO
Suryoday has opted for a public issue for the following reasons:
- To raise funds for augmenting the Bank’s Tier-1 capital base to meet the Bank’s future capital requirements.
- To meet the requirements set by the RBI where SFBs are required to list within 3 years of reaching a net worth of Rs. 500 crore.
In Closing
The IPO opens on 17th March and closes on 19th March 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Suryoday Small Finance Bank.
That’s all for this post. Do let us know what you think of Suryoday Small Finance Bank IPO Review. Are you planning to apply for this IPO or not? Comment below. Happy investing!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
