PremiumSBFC Finance has filed its draft prospectus with the market regulator to raise funds to the tune of ₹1,600 crore through the initial public offering (IPO). The public offer is a mix of fresh issues and offers for sale (OFS). The company plans to utilise a part of the proceeds for meeting future Tier-1 capital requirements. After the IPO, SBFC's equity shares will be listed on the stock exchanges BSE and NSE.
According to the draft prospectus, the ₹1,600 crore IPO includes a fresh issue of ₹750 crore and OFS of ₹850 crore.
Under the OFS, promoters such as Arpwood Partners Investment Advisors will offload a portion of its stake aggregating ₹398.19 crore, while Arpwood Capital will divest stakes amounting to ₹97.72 crore, Eight45 Services to sell shares around ₹79.08 crore, and SBFC Holdings will divest stakes around ₹275 crore.
The equity shares offered under the IPO will have a face value of ₹10 each.
Of the total IPO, 50% of the issue size will be reserved for qualified institutional buyers (QIBs), while 15% of the size will be allocated to non-institutional investors (NII), and the remaining 35% will be offered to retail individual investors (RII).
SBFC plans to utilise the proceeds from the fresh issue under the IPO towards augmenting its capital base to meet future capital requirements arising out of the growth of its business and assets. Also, the company expects to receive the benefits of listing of equity shares on exchanges.
SBFC anticipates that the net proceeds will be sufficient to satisfy its Tier- I capital requirements.
However, the net proceeds from the OFS will be given to the promoting shareholders.
The details of price bands, timeframe, and other details will be announced after Sebi gives a go-ahead to the IPO.
ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company are acting as the book-running lead managers of the IPO, while KFin Technologies is the registrar to the offer.
SBFC Finance is a systematically important, non-deposit-taking non-banking finance company that offers secured MSME loans and loans against gold with a majority of its borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working-class individuals.
The NBFC serves customers in tier II and tier III cities, thereby fostering entrepreneurship in these regions, focusing on customers who have a strong credit history but may lack formal proof of income documents.
Among MSME-focused NBFCs in India, SBFC has one of the largest highest assets under management (AUM) growth at a CAGR of 40% from fiscal 2019 to fiscal 2022. Also, the company's disbursements recorded robust growth at a CAGR of 39% between fiscal 2019 to fiscal 2022.
SBFC believes its products allow many underserved and underbanked customers to thrive. The company has a diversified pan-India presence, with an extensive network in our target customer segment. By end of the June 2022 quarter, SBFC's footprint is across 04 cities, spanning 16 Indian states and two union territories, with 135 branches.
As of June 30, 2022, the company's net profit is around ₹320.66 million and its total income is around ₹1,601.23 million. In FY22, its income and net profit were around ₹5,307.02 million and ₹645.21 million compared to total income and net profit of ₹5,115.33 million and ₹850.10 million in FY21 respectively.