Capital Small Finance Bank files draft papers with Sebi to raise funds via IPO

Capital Small Finance Bank has filed preliminary papers with capital markets regulator Sebi to mop up funds through an initial share sale.

The initial public offering (IPO) consists of fresh issuance of equity shares worth Rs 450 crore and an offer for sale of up to 38.40 lakh equity shares, according to draft red herring prospectus (DRHP).

The OFS will see the sale of up to 3.37 lakh equity shares by PI Ventures LLP, up to 6.04 lakh equity shares by Amicus Capital Private Equity I LLP, up to 70,178 equity shares by Amicus Capital Partners India Fund I, up to 8.37 lakh equity shares by Oman India Joint Investment Fund II and up to 19.91 lakh equity shares by other shareholders.

The small finance bank (SFB) proposes to utilise net proceed from the fresh issue towards augmentation of the bank's Tier-I capital base to meet the future capital requirements.

Capital Small Finance Bank was granted Scheduled Status by the Reserve Bank of India in February 2017.

The total business of the bank has crossed Rs 8,588 crore with over 7.66 lakh accounts. The bank has 80 per cent of its business in rural and semi-urban areas, with priority sector lending of 80.81 per cent of the Adjusted Net Bank Credit as of March 31, 2020. The lender is extending loans primarily to small borrowers. As of March 31, 2020, 59.46 per cent of the total advances were up to the ticket size of Rs 25 lakh.

At present, the bank has a presence in Punjab, Delhi, Haryana, Rajasthan along with the Union Territory of Chandigarh with a total of 159 branches.

Edelweiss Financial Services Limited, Axis Capital Limited and SBI Capital Markets Limited are the book running lead managers to the issue.

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