Capital Small Finance Bank IPO invites public participation

Ahmedabad, Feb 4: Capital Small Finance Bank initial public offering (IPO) will open for subscription on February 7, 2024 and closes on February 9, 2024. The price band of the offer has been fixed at ₹445 to ₹468 per share, with a face value of ₹ 10.

 The bids can be made for a minimum of 32 equity shares and in multiples of 32 shares thereafter. Thus, retail investors can invest a minimum of Rs 14,976 for 32 shares and their maximum investment will be Rs 1,94,688 for 416 shares as they cannot exceed the investment limit of Rs 2 lakh for IPO.

Capital Small Finance Bank’s return on total assets (ROA) is 0.9%, while the return on equity is 12.1%. The Return on weighted capital stands at 10.3%. These key indicators provide valuable information for investors to assess the bank’s financial performance and potential for growth.

The Management team of Capital Small Finance Bank’s  comprising of  Sarvjit Singh Smra, Managing Director & CEO,  Munish Jain Executive Director and CFO of the bank alongwith others was in Ahmedbad o brief the media about the company’s IPO. MD, Samra on this occasion said “by fostering financial inclusion and stimulating economic growth in underserved areas, small finance banks will contribute significantly to the overall economic development of the country. This impact on the broader economy will be a driving force for their future growth”.

The bank proposes to utilize the net proceeds from the fresh issue towards augmenting the bank’s tier – I capital base to meet its future capital requirements. As the Bank continues to grow its loan portfolio and asset base, the Bank expects to require additional capital in order to continue to meet applicable capital adequacy ratios with respect to its business. The bank intends to grow its loan advances which would require Tier – I capital to comply with the applicable capital adequacy requirements. Further, the proceeds from the fresh issue will also be used towards meeting the expenses in relation to the offer.

As India’s first small finance bank in 2016 the Capital Small Finance Bank commenced its operations and is among the leading SFBs in India in terms of cost of funds, retail deposits, and CASA deposits for Fiscal 2023. Also, they had the highest proportion of retail deposits at 97.90% along with a CASA ratio of 41.88% resulting in the lowest cost of funds of 5.12% among the SFBs as of Fiscal 2023(Source: CRISIL MI&A Report).

Jalandhar-based Capital Small Finance Bank is expecting approval from the Securities and Exchange Board of India (Sebi) for an IPO consisting of a fresh issue of Rs 450 crore by next month, said Managing Director (MD) and Chief Executive Officer (CEO) Sarvjit Singh Samra, in an exclusive interview with on November 10.

Capital Small Finance Bank is an Indian small finance bank founded in April 2016 as a microfinance lender, with its headquarters in Jalandhar, India. Capital Small Finance Bank Limited started operations as India’s 1st Small Finance Bank on April 24, 2016 after conversion from Capital Local Area Bank.

It is noteworthy to know that the Small finance banks (SFB) are a type of niche banks in India. Banks with a SFB license can provide basic banking service of acceptance of deposits and lending. The aim behind these is to provide financial inclusion to sections of the economy not being served by other banks, such as small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

The Bank transitioned from a Local Area Bank to Small Finance Bank with 47 Branches. In a short span, 118 new Branches have become operational, taking the total number of Branches to 165.

With the customer relationship- based banking approach, diversified & secured lending practices with special emphasis on rural and semi urban the bank is determined to march ahead even as it serves impressively to the middle range account holders as their primary bank.

Disclaimer:  We suggest investors to check with certified experts before making any investment decisions.