Ujjivan Small Finance Bank begins IPO preparation

IPO (1)

Kolkata: Ujjivan Small Finance Bank (USFB) has begun groundwork for initial public offering (IPO) while its prompter is still evaluating other options for listing by the January next year deadline as mandated by Reserve Bank of India.

The bank board has approved the proposal for an IPO earlier this week. The small finance bank is 100 per cent owned by its holding company Ujjivan Financial ServicesNSE -2.18 % (UFSL).

“Our board, under the prevailing circumstances, has approved listing via IPO route subject to market conditions and other external factors. We are preparing for the process and will list by the stipulated time,” bank Managing Director Samit Ghosh said.

Equitas Holdings, promoter of Equitas Small Finance Bank, has however decided to offer 47 per cent of its ownership in the bank to its existing shareholders which will help it list the bank without making an IPO. The deadline for Equitas to make its bank listed has been September 4.

Under the licensing agreement with the sector regulator, Ujjivan Small Finance Bank is required to be listed by January 31, 2020.

“UFSL and USFB also continue to jointly evaluate other options to achieve listing of USFB’s equity shares in accordance with guidance from the RBI and applicable law,” said Ittira Davis, managing director at UFSL.

The holding firm has also reported Rs 83 crore net profit in the June quarter, registering 87 per cent rise over Rs Rs 46 crore in the year ago period. This was on a total income of Rs 689 crore, which grew 51 per cent year-on-year. It’s net interest margin was at 12 per cent for the period against 12.4 per cent a year back.

“All our asset businesses have contributed well to gross advances which grew 51 per cent year on year to Rs 11783 crore. Our disbursement for the quarter is up 41 per cent despite first quarter being seasonally weak quarter for us historically,” Ghosh said.

The bank’s deposit mobilization more than doubled to Rs 7,956 crore from Rs 3,803 crore a year back, largely driven by retail deposits which accounted for 43 per cent of total deposits.

Its asset quality remain stable with gross non-performing assets ratio being at 0.8 per cent.