Utkarsh Small Finance Bank Has Raised Rs 240 Cr Ahead Of IPO

Kotak Mahindra Capital Company has acted as financial advisor to the bank for the private placement round.

Updated on: 22 March 2021 5:47 pm

Microfinance lender Utkarsh Small Finance Bank on Monday said it has raised a little over Rs 240 crore through a private placement of equity shares ahead of its initial share-sale. Kotak Mahindra Capital Company acted as financial advisor to the bank for the private placement round.

Pursuant to an agreement in February, the bank has concluded a private placement of its equity shares and raised Rs 240.47 crore by allotting 89,061,647 equity shares at Rs 27 per equity share to six investors, the lender said in a statement.

The six investors are -- Olympus ACF Pte Ltd, Ability Participations Mauritius; Aavishkaar Bharat Fund, Growth Catalyst Partners LLC, Triodos Sicav II - Triodos Microfinance Fund, Triodos Funds BV (in its capacity as the legal owner of Triodos Fair Share Fund), it added.

Earlier this month, Utkarsh Small Finance Bank filed preliminary papers with capital markets regulator Sebi to raise Rs 1,350 crore through an initial share-sale.

The initial public offer (IPO) comprises a fresh issue of equity shares worth Rs 750 crore and an offer of sale to the tune of Rs 600 crore by promoter Utkarsh Coreinvest Ltd, according to draft red herring prospectus (DRHP).

Additionally, this Varanasi-headquartered lender may undertake a pre-IPO placement of up to Rs 250 crore in consultation with the lead managers to the offer.

Proceeds from the fresh issue would be utilised to augment the tier-1 capital base to meet future capital requirements.

Utkarsh began operations as a small finance bank in 2017, transiting from a microfinance lender in 2009. The small finance bank's bulk of the lending portfolio is towards microfinance.

According to a Crisil report, Utkarsh is one of the most profitable small finance banks in the country as of FY2020.

As of September 30, 2020, the small finance bank across 528 banking outlets served 2.74 million customers majorly located in rural and semi-urban areas of Bihar, Uttar Pradesh, and Jharkhand that has a significant untapped market.