IPO-Note Suryoday Small Finance Bank Ltd
Rs-303-Rs 305 per Equity share Recommendation: Avoid

 

Suryoday Small Finance Bank Ltd. is the leading SFBs in India, commenced its business with effect from January 23, 2017. Prior to the commencement of operations as an SFB, it operated as an NBFC – MFI carrying out microfinance operations and operated the joint liability group lending model for providing collateral free, small ticket-size loans to economically active women belonging to weaker sections. Joint Liability Group (JLG) is a lending model that enables a group of individuals to take loans for income generating activity by forming a group, wherein group members guarantee each others’ loans.

 

Suryoday Small Finance Bank Ltd IPO

Wants To Apply Online

 

open-demat-online

Issue Details
Objects of the issue ·          Augmenting the Bank’s Tier – 1 capital base to meet the Bank’s future capital requirements

·          General corporate purposes

Issue Size Total issue Size -Rs. 582 Cr.

Fresh Issue – Rs 248  Cr.

Offer for Sale – Rs. 334 Cr.

Face value  

Rs.10 Per Equity Share

Issue Price Rs. 303 – Rs. 305
Bid Lot 49 shares
Listing at  

BSE, NSE

Issue Opens: 17th March, 2021 – 19th  March, 2021
QIB 50% of Net Issue Offer
Retail 35% of Net Issue Offer
NIB 15% of Net Issue Offer

 

Financial Performance:

Financial-Performance-Small -finanace-bank

Shareholding Pattern:

Shareholding Pattern Pre- Issue Post Issue
Promoters & Promoter Group 30.35% 28.02%
Public 70.09% 71.98%

 

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Check Suryoday Small Finance Bank Ltd IPO Allotment Status

Suryoday Small Finance Bank Ltd IPO allotment status would be available soon after the IPO closure date. Usually the allotment comes within a week from the closing date which in this IPO yet to be announced.

One can check the allotment on the given below link with PAN number or Application number or DP Client Id. All you need to do is to follow these steps:-

  1. To  Suryoday Small Finance Bank Ltd  IPO  Allotment Status
  2. Go to Application Status
  3. Select IPO as Suryoday Small Finance Bank Ltd
  4. Enter your PAN Number or Application Id or DP Client Id.

 

  Suryoday Small Finance Bank Ltd IPO

Application Form

 

Strengths:

  • Customer centric approach with a focus on financial inclusion
  • Diversified asset portfolio with a focus on retail operations
  • Fast evolving granular deposit franchise
  • Track record of strong financial performance and cost efficient operations

Key Highlights:

  • Deposit base of the company has grown at a CAGR of 94.95% from Rs. 749.52 crore as of March 31, 2018 to Rs. 2,848.72 crore as of March 31, 2020.
  • Deposit portfolio is primarily sourced from Maharashtra and Tamil Nadu with each state contributing to 49.21% and 23.57%
  • Gross Loan Portfolio has grown at a CAGR of 46.98% from Rs. 1717.78 Crore as of March 31, 2018 to Rs. 3710.84 Crore as of March 31, 2020.
  • As of December 31, 2020, GNPA accounted for 0.78% of gross advances, while NNPAs accounted for 0.33% of net advances.
  • Net Interest Margin of the bank decreased from 12.30% in 9MFY20 to 8.49% in 9MFY21.

Risk Factors:

  • As of December 31, 2020, advances to Micro Finance segments represented 70.35% of total Gross Loan Portfolio any adverse developments in the microfinance sector could adversely affect business of the company.
  • Have a limited operating history as an SFB and future financial performance cannot be evaluated on account of growing scale of operations.
  • Target borrower segment primarily comprises small traders, individuals with micro-enterprises and others belonging to the unorganized sector, who are most impacted due to the economic downturn caused by COVID-19
  • The Bank has low CASA ratio of 13.32% as compared to its peers.

Outlook:

SSFBL products and services include Joint Liability Group loans, housing loans, commercial vehicle loans among others, with 70% mix comprising of JLG loans. The Bank is diversifying its product mix from unsecured JLG loan to secured loans like CV & affordable housing with JLG loans share comes down to 70.35% in 9MFY21 from 90% in FY18. On a Proforma basis, Bank’s gross NPA ratio as on December 31, 2020 stands at 9.28%, of this 8.49% pertains to new proforma GNPA showing risk profile of loan to JLG customers who are most impacted due to COVID. Proforma NPA of the bank is also highest among its peers. Further the collection efficiency of bank is low at 82% as compared to peers. At the higher end of the price band of Rs. 305, the stock is offered at a P/B value of 2.45x on FY20 Post issue Book value per share of Rs. 123 which is slightly higher than its peers. We would recommend avoid to this IPO considering risk factors and financials of the company. There are other companies in SFB industry with better financials than the SSFBL hence investors can consider those companies.

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