SBFC Finance Limited’s Initial Public Offering to open on Thursday, August 3, 2023, sets price band at ₹54 to ₹57 per Equity Share

Mumbai, July 28, 2023: SBFC Finance Limited is a systemically important, non-deposit taking non-banking finance company (“NBFC-ND-SI”) offering Secured MSME Loans and Loans against Gold, with a majority of its borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals has fixed the price band at ₹54 to ₹57 per Equity Share for its maiden public offer. The initial public offering (“IPO” or “Offer”) of the Company will open on Thursday, August 3, 2023, for subscription and closes on Monday, August 7, 2023. Investors can bid for a minimum of 260 Equity Shares and in multiples of 260 Equity Shares thereafter.

The Public Issue of face value of ₹10 per Equity Share comprises of fresh issuance of equity shares worth Rs 600 crore and an Offer for Sale (OFS) of Rs 425 crore. The offer also includes a reservation for a subscription by eligible employees.

The company, in consultation with the lead bankers had undertaken a private placement of 27.27 million shares at an issue price of Rs 55 per equity share (including a premium of Rs 45 per equity share) aggregating to Rs 150 crore in a pre-IPO placement, and the fresh issue size was reduced from Rs 750 crore to Rs 600 crore.

The proceeds from its fresh issuance to the tune of Rs 600 crore will be towards augmenting the capital base of the company.

SBFC Finance is a prominent NBFC in India that concentrates on supporting Micro, Small, and Medium Enterprises (MSMEs). According to a CRISIL Report, the company has achieved exceptional growth in its assets under management (AUM), with a remarkable Compound Annual Growth Rate (CAGR) of 44% during the period from Fiscal 2019 to Fiscal 2023. Additionally, it has experienced a healthy disbursement growth, with a CAGR of 40% between Fiscal 2021 and Fiscal 2023. As of March 31, 2023, the average ticket size (ATS) for its various loan categories stood at ₹0.99 million for Secured MSME Loans, ₹0.09 million for Loans against Gold, and ₹0.69 million for other unsecured loans, based on disbursed amounts. The company’s total Asset Under Management as of March 31, 2023, amounted to ₹4,942.82 crore, and it had provided loans to 1,02,722 customers by that date.

SBFC Finance primarily caters to customers in tier II and tier III cities, playing a crucial role in fostering entrepreneurship in these regions. It focuses on serving customers who have a strong credit history but may lack formal proof of income documents. By focusing on this niche, the company aims to address the funding needs of deserving individuals and businesses. As of March 31, 2023, SBFC Finance boasts an expansive footprint in 120 cities across 16 Indian states and two union territories, operating through a network of 152 branches. This widespread presence enables the company to reach a diverse customer base and provide financial assistance to those in need throughout the country.

SBFC Finance’s revenue from operations increased by 38.51% from ₹529.05 crore in Fiscal 2022 to ₹732.81 crore in Fiscal 2023, primarily due to an increase in interest income, in interest on loans and growth in AUM. Profit after tax increased 132.08% from ₹64.52 crore in Fiscal 2022 to ₹149.74 crore in Fiscal 2023.

ICICI Securities Limited, Axis Capital Limited, and Kotak Mahindra Capital Company Limited are the book running lead manager and KFin Technologies Limited is the Registrar to the Offer. The Equity Shares are proposed to be listed on BSE and NSE.