SEBI nod to bring Jana Small Finance Bank IPO
Jana Small Finance Bank has received market regulator SEBI’s nod to raise funds through initial share-sale. According to the draft Red Herring Prospectus (DRHP), the initial public offering (IPO) consists of an offer for sale of equity shares worth Rs 700 crore and 92,53,659 shares by existing shareholders.
Those who sold shares in the offer for sale included Bajaj Allianz Life Insurance Company, Hero Enterprise Partner Ventures, ICICI Prudential Life Insurance Company, Enum Securities, North Haven Private Equity Asia Platinum Pte Ltd, QRG Enterprises and Tree Line Asia Master Fund (Singapore) Pte. Huh. Ltd.
The small finance bank, which filed the initial IPO document with SEBI in April, received its comments on July 9, an update with SEBI showed on Monday. SEBI’s opinion is necessary for any company to launch public issues like IPO, follow-on public offer (FPO) and rights issue.
According to merchant banking sources, the IPO is expected to fetch Rs 1,100 crore.
According to the draft papers, the small finance bank proposes to use the net proceeds from the new issue to augment its Tier-1 capital base to meet future capital requirements. In addition, the proceeds will also be used to meet the expenses in connection with the proposal.
Jana Small Finance Bank may also consider pre-IPO placements for an aggregate amount of over Rs 500 crore, including the proposed additional issue to its promoters for an aggregate amount of up to Rs 400 crore.
The pre-IPO placement, if done, will be completed before the filing of the red herring prospectus with the Registrar of Companies (ROC). If a pre-IPO placement is done, the amount raised will be deducted from the fresh issue.
The lender serves low-banked customers through various products, which include zero balance savings accounts, fixed deposits with attractive interest rates, collateral-free loans and affordable housing loan schemes. It provides loans to MSMEs (Micro, Small and Medium Enterprises), agriculture, individuals, affordable housing and two wheeler buyers, and also provides gold loans to customers.
Jana Small Finance Bank is one of the 10 financial institutions that received in-principle approval from RBI for a small finance bank in 2015. The bank received its last banking license in April 2017. Axis Capital, ICICI Securities and SBI Capital Markets are the merchant bankers on the issue.
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