Capital Small Finance Bank Share Price

Capital Small Finance Bank Unlisted Shares

Content

Capital Small Finance Bank Essentials

Here in this research report, you will get:
- Capital Small Finance Bank IPO Review and Analysis
- Capital Small Finance Bank Pre IPO Details
- Capital Small Finance Bank Upcoming IPO Details
- Expected Capital Small Finance Bank Upcoming IPO Date
- Expected Price Band
- Management Details (Ownership)
- Business Model
- Key Ratios
- Peer Comparisons
- Financial reports (Profit and Loss Statements, Balance Sheets, Results, Growth, Valuations, Funding Rounds)
- Latest News (Articles and Videos)
- Upcoming and Past Events Details
- Rating and recommendations for the Company's shares (Whether to Buy/Sell/Hold)
- Capital Small Finance Bank Share Price (Latest in Pre IPO Market)

ISIN

INE646H01017

Face Value

₹10.00

Total Share

3,40,44,091

Total Income

₹292.15 Cr

Profit After Tax

₹101.86 Cr

EPS

₹18.41

P/E

19.55

P/B

2.54

Market Capitalisation

₹1,225.59 Cr

Enterprise Value

₹1,327.99 Cr

Book Value

₹141.96

Intrinsic Value

₹1,284.89

Dividend Yield

0.28 %

Earnings Yield

5.11 %

Sector

Financials

Sub-sector

Small Finance Bank

Capital Small Finance Bank Growth

About Capital Small Finance Bank

Capital Small Finance Bank(CSFB) Limited provides a range of banking and financial products and services. They operates through Treasury, Corporate / Wholesale Banking, Retail Banking, and Other Banking Operations segments. It offers current and savings accounts, and term deposits, mortgage loans against properties; financing services to commission agents; loans against rentals; general credit card schemes; and credit cards, as well as schemes for SMEs.
The bank's core strategy is to build a robust retail focused banking franchise by enabling access to affordable credit in the states, they operate with special emphasis on rural and semi-urban areas.
The bank has been granted Scheduled Status by the RBI. As of June'21, bank were present in four States with 159 branches and 161 ATMs with 74% of our branches located in rural and semi-urban areas covering 19 districts and 77.35% of our total customers. The bank also introduced 7-Day branch banking with extended banking hours since its first day of operations.
They focus primarily on the middle-income customer segments i.e., customers with an average annual income of 0.4 mn to 5 mn.
CSFB operates on a branch-based model. Headquartered in Jalandhar, Punjab, they have over the years expanded our SFB operations strategically in the north Indian states.
It is backed by institutional finance investors such as HDFC Standard Life insurance, Pi Ventures LLP, Amicus Capital Partners, ICICI prudential life, SIDBI and Oman India joint investment fund.
CSFB started operations as India's 1st Small Finance Bank on April 24, 2016 after conversion from Capital Local Area Bank, and is among the leading SFBs in India in terms of asset quality, cost of funds, retail deposits and CASA deposits for Fiscal 2021. Prior to conversion to a Small Finance Bank, Capital Local Area Bank was operating as India's largest local area bank since January 14, 2000.

Capital Small Finance Bank IPO Details

As per RBI rules, Small finance bank(SFB) has to get listed within three years from the time the bank reaches a net worth of ₹500 crores.
However, small finance banks having net worth of below Rs.500 crore could also get their shares listed voluntarily, subject to fulfillment of the requirements of the capital markets regulator.
Capital small Finance bank filed its DRHP on 30 Oct'21.
The IPO comprises of fresh issue of equity shares aggregating up to ₹450 crore and an offer for sale of up to 38.40 lakh equity shares from existing shareholders, including PI Ventures, Amicus Capital, and Oman India.

Capital Small Finance Bank
Fresh Issue

₹ 450.00 Cr

Capital Small Finance Bank
Total IPO Size

₹ 450.00 Cr

Capital Small Finance Bank
Offer for Sale No. of Shares

0.38 Cr

Capital Small Finance Bank Funding

Funded By	Funding Amount	Date of Investment	Funding Round	Fund Name
Buyer Company: Amicus Capital Partners; Amicus Capital Partners India Fund I; Amicus Capital Private Equity I LLP; Oman India Joint Investment Fund II; Oman-India Joint Investment Fund Management Company; Pi Ventures LLP	₹ 134 Cr	Nov 2019	Growth	Private Equity
Amicus Capital Partners; Pi Ventures Fund I; Pi Ventures LLP	₹ 132 Cr	Jul 2019	Series B	Venture Capital
HDFC Standard Life Insurance Company Limited, ICICI Prudential Life Insurance Company Limited, Pi Ventures Fund I, Pi Ventures LLP	₹ 64.66 Cr	Apr 2017	Venture	Venture Capital

Capital Small Finance Bank Subsidiaries

The Bank does not have any holding or subsidiary companies

Capital Small Finance Bank Business Model

The CSFB commenced operations as India’s first small finance bank in 2016, and is among the leading SFBs in India in terms of asset quality, cost of funds, retail deposits, and CASA deposits.
Its loan book is diversified across a holistic group of loan products with 38% in the agricultural segment, 23% in MSME and trading segment, 24% in mortgage loans, and 15% in other loans comprising consumption, and corporate loans. This helps the bank to mitigate risk and optimise resources and also fulfil priority sector lending requirements

Capital Small Finance Bank Revenue Segmentation

Interest Income
Commission

Profit on sale of investment
Other Income

Capital Small Finance Bank Product & Services

Loan Portfolio

Agricultural Loans
MSME and trading Loans
Retail and mortgage loans
Consumption loans
Loan against deposits
Large corporate business loans

Deposit Portfolio

Saving deposit account
Current deposit account
Term deposits
Other fees based products(insurance and forex services)

Capital Small Finance Bank Assets

As of 31st March'22 company has fixed Assets of worth INR 83.6 Cr.

Capital Small Finance Bank Industry Overview

Industry Statistics

The Indian Banking structure has undergone appropriate transformation with the formation of a new banking institution – Small Finance Banks (SFBs). It is a specific segment of banking created by RBI under the guidance of Government of India with an objective of furthering financial inclusion by primarily undertaking basic banking activities to un-served and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganized entities.
SFBs also work as institutionalized systems to undertake deposits, which enables them to access low- cost funds as compared to NBFCs.
These SFBs are expected to penetrate rural India and help achieve financial inclusion by providing basic Banking and credit services to a larger population. With this faster growth in rural areas can be expected in the future given the huge untapped potential. Between FY15 and FY21, the number of credit accounts in semi-urban areas grew where share in branches of PSBs has fallen as against SFBs increasing their share from 1% FY18 to 3% in FY21.
These entities can focus on both the asset and liability side where currently the Private sector banks(PSBs) dominate. This provides considerable opportunity to SFBs to gain further share through their specialized offerings and expanding their services to the underbanked.
Similarly, in terms of credit and deposits, the share of SFBs across various regions is in the range of 0-2% and hence significant improvement in their share is possible by providing targeted services by being attached with the population at ground level. Given the strong hold and experience of these entities in dealing with customers across these regions, the share of SFBs will go up as against the public and private sector banks and thus presents a large opportunity for SFBs to penetrate these regions deeply at the expense of others.
SFB’ AUM clocked 26% CAGR during FY16-21. CRISIL Research expects the sector’s loan portfolio to see a strong 22% CAGR in the near term as most of the SFBs have completed the transition phase and likely to get benefit from the operating leverage.
SFBs have a significant growth potential given their current relative smaller scale and level of financial inclusion in the country. The overall deposit base of SFB’s doubled to around Rs.375Bn as of FY19. It further increased 53% CAGR to reach Rs.877Bn in FY21.
For non-NBFC entities like a local area bank or an urban co-operative bank, the scheduled bank license to run as an SFB acts as a booster in terms of enhancing their reach in the geographies where they already are present to further bank the unbanked and provide extended services beyond their initial scope of activities.
Bank credit and deposits are predominantly concentrated in the southern and western regions, whereas deposit penetration in the northern region has maintained its share at 21% of the overall banking deposits. As a result, there is a huge scope for further penetration in the northern, eastern, north-eastern, and central region across both credit and deposits.
With their localized past experience, SFBs, especially the ones which were existing as local area banks have the ability to manage local stakeholders and maintain operational efficiency more effectively, this was a key point in efficiency growth of capital small finance bank as well, as of 2020, Capital Small Finance Bank covers around 5.2% market share.

Future Prospects

India is expected to be the fourth largest private wealth market globally by 2028.
According to the CRISIL Research Report, the northern region is well positioned to grow with aid from the financial institutions to further support the flourishing agriculture and industrial sector.
The deposit penetration in the northern region has maintained its share at 21% of the overall banking deposits as of FY21 which is comparatively lower than Southern and Western regions. Accordingly, there is huge scope for further penetration in the northern, eastern, north-eastern, and central region across both credit and deposits.
As per CRISIL the share of SFBs in deposits as well as credit has seen a steady rise over the years and is expected to reach 1% and 1.5% respectively by Fiscal 2024 from the current 0.6% and 1.0% in deposits and credits in Fiscal 2021.
According to CRISIL, SFB’s AUM clocked 26% CAGR during fiscals 2016-2021. CRISIL research expects the sector’s loan portfolio to see a strong 22% CAGR in the near term as most of the SFBs have completed the transition phase and likely to get benefit from the operating leverage.
The share of SFBs in deposits as well as credit has seen a steady rise over the years and is expected to reach 1% and 1.5% respectively by fiscal 2024 from the current 0.6% and 1.0% in deposits and credits in fiscal 2021. This will be on the back of robust growth on account of focused penetration and on the ground reach of these entities in comparison to the other more established player groups.
In terms of branches, the share of SFBs in total branches is lowest in the Eastern and the Central region followed by the Northern region. These areas are still largely dominated by public sector banks. This provides considerable opportunity to SFBs to gain further share through their specialised offerings and expanding their services to the underbanked.

Government Initiatives

In December 2020, the Reserve Bank of India issued a draft circular on declaration of dividends by NBFCs, where in it proposed that NBFCs should have at least 15% Capital to Risk Weighted Assets Ratio (CRAR) for the last 3 years, including the accounting year for which it proposes to declare a dividend.
In November 2020, the Union Cabinet approved the government's equity infusion plan for Rs. 6,000 crores (US$ 814.54 mn) in the NIIF Debt Platform funded by the National Investment and Infrastructure Fund (NIIF) consisting of Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF) (NIIF-IFL).
In November 2020, two MoUs were signed—one between India International Exchange (India INX) and Luxembourg Stock Exchange and another between State Bank of India and Luxembourg Stock Exchange for cooperation in financial services, ESG (environmental, social and governance) and green finance in the local market.
The RBI has issued guidelines in an effort to contain the impact of the COVID-19 pandemic on the financial services sector. Under these guidelines, all term loans were eligible for moratoriums on instalments and working capital facilities on interest due during a period of six months, i.e., from March 1, 2020 until August 31, 2020 by the RBI, contingent on the lending institutions satisfying themselves that the same was necessitated on account of the economic fallout from COVID-19.
In order to accommodate the burden on banks’ cash flows on account of the Covid-19 pandemic, the RBI vide its circular dated April 17, 2020, has permitted banks to maintain liquidity coverage ratio as under: (i) April 17, 2020 to September 30, 2020 –80%; (ii) October 1, 2020 to March 31, 2021 – 90%; and (iii) April 1, 2021 onwards 100%.
Supreme Court of India has pronounced its judgement in the matter of Small Scale Industrial Manufacturers Association vs UOI & Ors. (“Judgement”) and other connected matters on March 23, 2021. Commercial banks, shall immediately put in place a Board-approved policy to refund/adjust the ‘interest on interest’ charged to the borrowers during the moratorium period, i.e. March 1, 2020 to August 31, 2020 in conformity with the Judgement.

Capital Small Finance Bank Awards & Achievements

The bank has surpassed National Targets in Priority Sector, Agriculture and Weaker Section Advances
It was accredited with 'ICAI Award for Excellence in Financial Reporting' for two consecutive years in

Capital Small Finance Bank Strengths

Capital Small Finance Bank(CSFB) is among the leading SFBs in India in terms of asset quality, cost of funds, retail deposits, and CASA deposits for FY21, and it has the highest CASA ratio of 42.2% in Fiscal 2022 as compared with other SFBs.
The bank has the highest proportion of secured lending of 99% as of FY21 among the SFBs. As of March 31, 2021, 99.39% of the loan book was secured with 86.24% of the loans secured with immovable properties.
They have leveraged technological capabilities to increase the scale of digital interactions and digital transactions with customers. Their digital transition has helped them to effect a wider outreach to customers which resulted in 2.87 mn digital transactions during FY21, increasing from 1.49 mn in FY19
CSFB's credit assessment processes and risk management practices enable them to maintain good asset quality and low delinquencies.
The bank prefers a single source for multiple financial services, and accordingly offers a range of credit and non-credit products and services to address a variety of financing requirements of the customer through our branch network.
As per CRISIL, the bank has the highest branch network in the state of Punjab as compared to any other SFBs and the fourth largest when compared with the private sector banks.
As of June 30, 2022, it was present in four states with 161 branches and 161 ATMs with 74% of branches located in rural and semi-urban areas covering 19 districts and 77.35% of total customers.
During the year, the Credit Rating of the Bank for Upper tier II instruments is “BWR A+ (Outlook Stable)”. As per the rating agency “Instruments with this rating are considered to have an adequate degree of safety regarding timely servicing of financial obligation. Such instruments carry low credit risk.

Capital Small Finance Bank Shortcomings

The bank's Gross-non performing assets(GNPA) are continuously rising for the past 5 years. In FY22 company has a GNPA of 2.45%. This shows the company is facing many defaults from borrowers and has increased its dealings in unsecured loans.
Total disbursements of the bank increased from 11,93. crores for FY19 to 1843 crores for FY22. This is increasing at the same rate as the loan book of the company, but it is much lower than that, which shows the company may have some problems in converting their loans to disbursement.

Capital Small Finance Bank Opportunities

The bank has huge profit potential by expanding product profile and customer base, bank can also focus on optimization of brand equity built on trust and performance in existing and newer geographies.
Digitization can play game changer in terms of improving cost efficiencies, increasing customer outreach and customer’s interface experience to digital products. The bank can focus on ‘phygital’ distribution of products and services to cater the banking needs of rural and semi-urban population which includes an optimum mix of physical and digital presence to scale our operations in a profitable manner.
Huge potential to invest in start-ups and business partners to enhance product range, improve efficiencies and enhance customer base and customer experience.
The company has strong presence in Punjab, they can leverage it and expand further in adjacent states of Haryana, Rajasthan and NCR. Their strategy to scale-up our operations is aimed at developing a deeply entrenched geographical presence which will let them serve a larger market for credit and effectively grow our advances.
The share of SFBs in deposits as well as credit has seen a steady rise over the years accordingly the bank is well positioned to take advantage of the tailwinds and intend to continue to grow the portfolio with focus on secured lending which we believe will provide us a competitive edge over our competitors.
The bank is planning to enter into business partnerships in the states where we do not have strong presence currently to gain an understanding of the new markets we intend to penetrate. It will help in mitigating the associated risks and will enable them to diversify products and services as well as geographical presence.

Capital Small Finance Bank Threats

Increased cyber security threats have risen the need of protection of customers data.
Penetration by existing players and emergence of newer competitors in the industry can squeeze margins for existing players.
Sudden changes in the government & regulatory guidelines can sometimes create pressure of margins.
This industry highly volatility and based on current scenario in the market there may be sudden changes in government rules and regulation which can have high impact on the company.