Fincare Small Finance Bank Limited IPO

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(i) It is a “digital-first” SFB with a focus on unbanked and under-banked customers, especially in rural and semi-urban areas. It has a deep understanding of unbanked and under-banked customers, especially rural customers, with over 14 years of experience in providing microloans.

(ii) They follow a business model focused on financial inclusion and aim to provide individuals and businesses with affordable financial products and services that meet their needs. The business objective is to enhance access to savings, credit and other financial products for unbanked and underbanked individuals, MSMEs and unorganized entities, especially in rural areas, by leveraging technology and last-mile distribution

(iii) The Bank operated as an NBFC-ND under the name ‘Disha Microfin Limited’ since 2010 and was registered as an NBFC-MFI in 2013. In 2016, upon receipt of the RBI In-Principle Approval, the Bank acquired the micro-finance operations of FFSPL (which started microfinance operations in 2007) and later changed its name to Fincare Small Finance Bank.

(iv) They have an extensive network of 528 banking outlets, 219 business correspondent outlets and 108 ATMs (of which 85 are cash recyclers) spread across 16 states and three union territories, covering 192 districts and 38,809 villages and which reached 2.7 million customers, as of December 31, 2020. They have created a network of banking outlets in urban and Tier 1 cities to focus on deposits mobilization, while maintaining the strong network in rural and semi-urban locations to drive our loan products

(v) The network is particularly strong in south and west India, where, according to CRISIL, states such as Karnataka and Gujarat have seen high real GDP growth. The network includes banking outlets that are operated by us and those that are operated by business correspondents, with whom we enter into contractual arrangements to operate the banking outlets.

(vi) This Bank and Promoter are backed by marquee investors, including True North Fund V LLP, Wagner Limited, Tata Opportunities Fund, LeapFrog Investments, SIDBI, Kotak Mahindra Life Insurance, and Edelweiss Tokio Life Insurance.

Competitive Strengths

(i) A customer-centric approach driven by digital banking
(ii) Strong commitment
(iii) Multi-channel, a low-cost distribution network with diversified geographic presence
(iv) Stable and experienced professional leadership team

Objects of the Fincare Small Finance Bank Limited IPO:

The Offer comprises of the Fresh Issue and the Offer for Sale
DRHP of Fincare Small Finance Bank Limited IPO

Fincare Small Finance Bank Limited IPO Details:

Issue Size: 1330 Cr.
Listing At: NSE,BSE

Promoters And Management:

(i) Pramod Kabra, is the Part-time Chairman and Non-Executive Director of the Bank. He holds a bachelor’s degree in commerce from Jodhpur University. He is also a chartered accountant with the Institute of Chartered Accountants of India. He is currently associated with True North Managers LLP. (ii) Rajeev Yadav, is the Managing Director and Chief Executive Officer of the Bank. He holds a bachelor’s degree in technology from the Indian Institute of Technology, Kanpur, and a postgraduate diploma in management from the Indian Institute of Management, Ahmedabad. He was previously the chief executive officer of G.E. Money Financial Services Private Limited. (iii) Alok Prasad, is an Independent Director of the Bank. He holds a master’s degree in arts from the University of Delhi. He was previously the chief executive officer of Microfinance Institutions Network (MFIN), the chairperson and director of South Asia Micro-entrepreneurs Network (SAMN), and has worked with the Reserve Bank of India and the National Housing Bank. (iv) Aarthi Sivanandh is an Independent Director of the Bank. She holds a bachelor's degree in commerce from the University of Madras, a bachelor’s degree in law from The Tamil Nadu Dr. Ambedkar Law University, and a master’s degree in law from Tulane University. She is enrolled with the Bar Council of Tamilnadu. She was the co-founder of Vichar Partners, an independent legal firm, which subsequently merged with J. Sagar and Associates. She is presently an equity partner with J. Sagar Associates.

Financials of Fincare Small Finance Bank Limited IPO:

(Fig. in Lakhs) A) Balance Sheet Analysis
Particulars 2018 2019 2020 9M FY 21
Share Capital 3,746 5,644 6,361 6,361
Reserves 30,009 60,956 84,016 94,408
Borrowings 1,06,898 1,28,307 1,36,816 1,06,201
Other Liabilities 86,759 2,22,267 4,84,434 5,55,367
Total Liabilities 2,27,412 4,17,174 7,11,627 7,62,337
Fixed Assets 2,230 3,307 4,036 3,507
Cash & Bank Balance with RBI 4,765 14,191 1,05,853 83,386
Investments 27,271 70,086 1,00,696 1,25,106
Other Assets 1,93,146 3,29,590 5,01,042 5,50,338
Total Assets 2,27,412 4,17,174 7,11,627 7,62,337
B) Profit and Loss Statements
Particulars 2018 2019 2020 9M FY 21
Interest Earned 31,408 60,526 1,07,026 93,955
Operating expenses 17,805 29,592 42,613 33,452
Operating Profit 13,603 30,934 64,413 60,503
OPM 43.31% 51.11% 60.18% 64.40%
Other Income 3,653 6,973 14,546 5,876
Interest Expended 11,891 22,907 45,150 41,879
Provision and contingencies 15,120 4,802 19,464 14,107
Profit After Tax -9,755 10,198 14,345 10,393
NPM -31.06% 16.85% 13.40% 11.06%
EPS -26.04 22.41 24.43 16.34
C) Cash-flow Statements
Particulars 2018 2019 2020 9M FY 21
Cash Flow from Operatons -45,011 -24,705 46,938 22,089
Purchase of Fixed Assets 2,072 2,307 2,433 694
Free Cash Flow -47,083 -27,012 44,505 21,395
Cash Flow from Investing -1,507 -2,168 6,679 -661
Cash Flow from Financing 43,788 44,018 17,941 -30,615

Comparison With Peers:

To be updated shortly

Recommendation on Fincare Small Finance Bank Limited IPO:

To be updated shortly

Lead Manager of Fincare Small Finance Bank Limited IPO:

  1. Ambit Capital Private Limited
  2. Axis Capital Limited
  3. ICICI Securities Limited
  4. IIFL Holdings Limited
  5. SBI Capital Markets Limited

Registrar of Fincare Small Finance Bank Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

301-306, 3rd Floor, Abhijeet -V, Opp. Mayor's Bungalow, Law Garden Road, Mithakhali, Ahmedabad 380006, Gujarat,India Tel: +917940011000

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