India's first small finance bank since 2016, Capital Small Finance Bank, has filed for an Initial Public Offering (IPO) with the Securities and Exchange Board of India (Sebi). The filing occurred on Friday, aiming to raise INR 450 crore ($60.8 million) through the issuance of fresh equity shares and an offer for sale (OFS).
The OFS involves prominent investors such as Oman India Joint Investment Fund II and PI Ventures LLP. In addition to the IPO, the bank is planning a pre-IPO placement of INR 90 crore ($12.1 million), which will further bolster its fundraising efforts.
The funds raised from these efforts will primarily be used to enhance the bank's Tier-I capital base and cover offer expenses. As a leading small finance bank (SFB) with a diversified portfolio, Capital Small Finance Bank boasts a secured lending rate of 99.82%, demonstrating its robust risk management practices.
According to InvestingPro data, Capital Small Finance Bank has a market cap of $177.9 million and a P/E ratio of 13. The bank's revenue stands at $95.71 million, indicating a stable financial footing. Despite a dip in revenue growth in the last quarter, the bank maintains a high gross profit margin of 92.72%.
InvestingPro Tips suggest that Capital Small Finance Bank has been successfully increasing its earnings per share and yields a high return on invested capital. This is reflected in the bank's return on assets of 3.57% and a dividend yield of 9.97%. For more detailed tips and insights, interested investors can visit InvestingPro which offers 11 additional tips for this company.
The issue is managed by Nuvama Wealth Management and DAM Capital Advisors. Once approved, the shares will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Capital Small Finance Bank has been a significant player in India's banking sector since it became the country's first SFB in 2016. Its successful transition from a microfinance institution to an SFB marked a milestone in India's banking history. The bank's stock price often moves in the opposite direction of the market, as per InvestingPro Tips, further reinforcing its position as a prominent player in the banking industry.
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