Indostar to raise up to Rs 2,000 cr via IPO, price band at Rs 570 - 572 per share

IndoStar Capital Finance is set to go public with the launch of its initial public offering (IPO) to raise Rs 1,800-2,000 crore including fresh capital worth Rs 700 crore. The rest of the money would be raised through a sale of 20 million shares by existing promoter shareholders.

The Everstone Capital-backed non-banking finance company’s IPO is priced in the band of Rs 570 to Rs 572 per equity share of face value of Rs 10 per share.

The IPO, the first in FY19, is scheduled to open on May 9 and close on May 11. Anchor investor allocation will be a day prior to the bid/offer opening date i.e. May 8.

The money is being raised to augment the capital base to meet its future capital requirements, said Pankaj Thapar, Chief Financial Officer at Indostar Capital Finance.

Investment banks JM Financial, Kotak Mahindra Capital Company, Morgan Stanley India Co., Motilal Oswal Investment Advisors and Nomura Financial Advisory and Securities (India) are managing the share sale.

IndoStar provides structured loans to corporates, small and medium enterprises and also affordable housing loans through its 100 percent-owned subsidiary, Indostar Home Finance.

It recently started offering vehicle and housing finance products under the new leadership of R. Sridhar, Executive Vice-Chairman and CEO. Sridhar was previously the Managing Director with Shriram Transport Finance Company.

"We are building our retail financing book and will use my past 30 years of experience to focus on providing finance to business owners in need of used-commercial vehicle finances…We will not look at unsecured lending for now,” Sridhar said.

The NBFC's loan book has been growing at a compounded annual growth rate of 14.4 percent for the past five years. As on December end 2017, its loan portfolio at Rs 3,205 crore with a gross non-performing asset (NPA) ratio of total loans at 1.7 percent.