AU Small Finance Bank will raise ₹1,000 crore from Temasek, a global investment company headquartered in Singapore.
According to a company statement, AU Small Finance has received its shareholders’ approval at an EGM held on June 15 to raise the money from Temasek.
This is the largest primary capital infusion in AU Bank and its first-ever since their last raise in fiscal 2012.
“This capital raise will strengthen our presence in both the digital and the physical marketplace. We remain focused on bringing efficiencies in our delivery model and creating new products and services to address the diverse needs of our customers. This fund raise will allow us to remain sufficiently capitalised in the near term, as we continue striving towards achieving a 35–40 per cent per annum growth target. We welcome Temasek to AU Bank,” said Sanjay Agarwal, MD & CEO of AU Bank, said.
AU Bank had clocked a disbursements growth of more than 60 per cent, AUM (asset under management) growth of about 50 per cent and mobilised about ₹8,000 crore of deposits in 2017-18.
Despite yields coming under pressure and a sharp rise in its operating expenses as a result of transitioning, AU Bank managed to deliver an ROA of about 1.7 per cent and ROE of 13.7 per cent, in the first fiscal, post becoming a bank.
Balancing capital requirements for growth and rewarding its investors, AU Bank’s board had proposed a dividend of ₹0.50 per share in its first year of listing.
As of March 31, 2018, AU Bank had expanded its branch network to over 500 touch points, including 306 bank branches, 97 asset centres, 89 BC outlets, 23 offices and 292 ATMs.
AU Bank’s other shareholders include marquee institutions like IFC, Warburg Pincus, Chrys Capital and Kedaara Capital.