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ESAF SMALL FINANCE BANK LTD IPO

15,000
Minimum Investment

Price Range (₹)

Rs. 57 –Rs. 60

Issue Size (₹ in Cr.)

Up to 463 Cr

Minimum Quantity

250 Shares

Bidding Period

Nov 3 – Nov 7, 2023
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ESAF Small Finance Bank Ltd IPO Issue timeline

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Subscription Status

Shareholder
Retail Individual Investor
Non-Institutional Investor
Qualified Institutional Buyers
Employee
Overall

About the ESAF Small Finance Bank Ltd IPO

- A small finance bank with a focus on unbanked and under-banked customer segments, especially in rural and semi-urban centres. (Source: Company RHP)

-Their primary products are advances (asset products) and deposits (liability products).

- They have a network of 700 banking outlets, 767 customer service centres 22 business correspondents, 2,116 banking agents, 525 business facilitators and 559 ATMs spread across 21 states and two union territories as at June 30, 2023. (Source: Company RHP).

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Strengths

Growing Retail Deposits portfolio
They have placed an emphasis on increasing Retail Deposits. Their Retail Deposits increased from ₹87,963.84 million as at March 31, 2021 to ₹133,230.03 million as at March 31, 2023, representing a CAGR of 23.07%, and further increased to ₹139,772.67 million as at June 30, 2023, an increase of 4.91%. (Source: Company RHP)

Technology-driven model with a digital technology platform
They offer their customers various digital platforms, including an internet banking portal, a mobile banking platform, SMS alerts, bill payments and RuPay branded ATM cum debit cards. All banking and payment transactions, such as remittances and utility payments, can be completed through these platforms. Their account opening and loan underwriting processes have been digitalised by using tablets, which enabled them to reduce turnaround time and offer better service to customers (Source: Company RHP)

Experienced Board and Key Managerial Personnel and Senior Management Personnel
They have an experienced Board comprising members with diverse business experience, many of whom have held senior positions in well-known financial services institutions. The members of their Senior Management Personnel have expertise in scaling up financial services organizations and collectively they have all the relevant experience in credit evaluation, risk management, treasury and technology (Source: Company RHP)

Risks

They may face asset liability mismatches, which could affect their liquidity.
They face liquidity risks due to mismatches in the maturity of assets and liabilities. Although they have implemented procedures and policies that are designed to mitigate liquidity risks, if they are unable to obtain additional borrowings or renew existing credit facilities for matching tenures of loan portfolio in a timely and cost-effective manner or at all, it may lead to mismatches between assets and liabilities, which could adversely affect their financial condition (Source: Company DRHP)

The Indian finance industry is intensely competitive
They face intense competition in all principal products and services. The RBI has awarded in-principle SFB licences to 12 applicants as of March 31, 2023 including them. (Source: CRISIL MI&A Report). Their competitors in the organized sector may have a better brand recognition, greater business experience, more diversified operations, a greater customer and depositor base, a larger branch network and better access to funding and at lower costs than they do.(Source: Company DRHP)

Financials

  • Net Worth
  • Total Income
  • Total Borrowings
  • Net Profit
  • Earnings Per Share

Industry Trends

- Rural India – Under penetration and untapped market presents a huge opportunity for growth  : Credit to metropolitan centres has decreased over the past few years with its share decreasing from 66% as at March 31, 2018 to 62% as at June 30, 2023. As at March 31, 2023, rural centres, which accounted for 47% of GDP, received just 8% of the overall banking credit, which shows the vast market opportunity for banks and NBFCs to lend in these centres.  (Source: Company RHP)


- Bank credit to move marginally faster than systemic credit :  Over the past decade, banking credit growth lagged systemic credit growth for several years as NBFCs grew at a much faster pace. Going forward, credit to the overall retail segment is expected to lead the growth of the banking sector, supported by healthy growth in housing, consumer durable, gold and other personal loans segments. CRISIL MI&A expects bank credit to grow at 12-14% CAGR between Fiscal 2023 and Fiscal 2025.(Source: Company DRHP)

Follow 3 simple steps TO APPLY IPO

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  • lock-in of 3 years
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    Go to the IPO section, select the IPO you want to apply from the list and click on ‘Apply’.

  • lock-in of 3 years
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    Fill in the quantity of the number of shares you want to buy. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.

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    Click on proceed to confirm the order. You can view the placed order under “order book”.

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  • lock-in of 3 years
    Select IPO

    Choose the IPO you want to apply from the list. Click on Apply.

  • lock-in of 3 years
    Fill in the required details

    Fill in the quantity of shares. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.

  • lock-in of 3 years
    Confirm your request

    Check the A/C, UPI details and click on proceed. You will get an UPI link by which payment can be made.

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