Fincare SFB postpones IPO, cites external factors

The hit taken by the bank on account of the COVID-19 pandemic and high volatility in the equity market arising from the Russia-Ukraine conflict have forced Fincare Small Finance Bank (SFB) to defer plans to list by July-August, the bank’s managing director and CEO Rajeev Yadav told Moneycontrol in an interaction on March 14. Yadav said the bank now aims to go public “at the earliest possible opportunity” in FY23.

In May, the SFB had filed the draft red herring prospectus (DRHP) with regulator Securities and Exchange Board of India (SEBI) to raise funds via an IPO. It is looking to raise Rs 1,330 crore through the offer which comprises a fresh issue of Rs 330 crore bank and an offer for sale of Rs 1,000 crore by promoter Fincare Business Services.

As per the Reserve Bank of India’s (RBI) guidelines for ‘on tap’ licensing of SFBs in the private sector, an SFB has to be listed within three years of achieving a net worth of Rs 500 crore. Fincare SFB started operations on July 21, 2017, and as on March 31, 2021, had a total gross loan portfolio of Rs 6,072 crore and deposits amounting to Rs 5,318 crore.

Once the bank is listed, the promoter stake will come down by 10-25 percent depending on the dilution methodology, Yadav said. Presently, Fincare Business Services holds 78.4 percent in the small finance bank, he said.