Ujjivan Small Finance Bank IPO to open today

The initial public offering (IPO) of Ujjivan Small Finance Bank, the subsidiary of Ujjivan Financial Services, will open for subscription on December 2.

This would be 12th company launching main board IPO in the current financial year 2019-20. The issue will close on December 4.

Kotak Mahindra Capital Company, IIFL Securities and JM Financial are book running lead managers to the issue. Equity Shares proposed to be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Ujjivan Financial Services (UFSL) received the Reserve Bank of India (RBI)'s in-principle approval to establish an Small Finance Bank on October 7, 2015, after which it incorporated Ujjivan Small Finance Bank Limited as a wholly-owned subsidiary.

UFSL, subsequent to obtaining RB's final approval on November 11, 2016 to establish and carry on business as an SFB, transferred its business undertaking comprising of its lending and financing business to bank, which commenced its operations from February 1, 2017.

The bank included in the second schedule to the Reserve Bank of India Act, 1934 as a scheduled bank on July 3, 2017. Promoter, UFSL commenced operations as an NBFC in 2005 with the mission to provide a full range of financial services to the 'economically active poor' who were not adequately served by financial institutions.

The bank continued to focus on lending to micro banking customers with deposits from its micro banking customers constituting 6.75 percent of its total deposits as of September 30, 2019.

The company launched the

IPO with a price band of Rs 3637 per equity share, a premium of Rs 26-27 over its face value of Rs 10 each.

The issue includes a reservation of Rs 75 crore worth of shares for subscription by eligible shareholders of Ujjivan Financial Services. They will get shares at a discount of Rs 2 per share.

Minimum bid lot is 400 equity shares, and in multiples of 400 equity shares thereafter.

The company is aiming to raise Rs 750 crore through this public issue.

The lender has already raised Rs 250 crore through pre-IPO placement of 71,428,570 equity shares.

The bank has proposed to utilize the net proceeds from the issue towards augmenting its tier - 1 capital base to meet its future capital requirements. Further, the proceeds from the issue will also be used towards meeting the expenses in relation to the issue.