Capital SFB IPO is looking to raise Rs 523.07 crores. The issue is a combination of fresh issue of 0.96 crore shares aggregating to Rs 450.00 crores and offer for sale of 0.16 crore shares aggregating to Rs 73.07 crores. Capital Small Finance Bank is a small finance bank founded in April 2016 and is headquartered in Jalandhar,
IPO opens
Feb 07, 2024
IPO Closes
Feb 09, 2024
IPO Size (Rs.)
₹523.07 Cr
IPO Size (shares)
11,176,713 shares
Breakup
Fresh issue ₹450.00 Cr + OFS ₹73.07 Cr
Face Value:
₹10 per share
IPO Price in Rs.
₹445 to ₹468 per share
Minimum Lot
32 Shares
Listing At
NSE , BSE
QIB
~50 %
NII Quota
~15
Retail Quota
~35%
Lead Manager
Nuvama Wealth Management, Dam Capital Advisors, Equirus Capital
Registrar
Linkintime
About Capital Small Finance Bank Limited:
Incorporated in 1999, Capital Small Finance Bank is a a small finance bank.
It started as a Local Bank in three districts of Punjab, Later covered 5 districts in Punjab.
It became the first non-NBFC microfinance entity to receive the SFB license in 2015.
Capital Small Finance Bank targets middle-income customer segments.
It has expanded its SFB operations in northern states of India such as Punjab, Haryana, Rajasthan, Himachal Pradesh and union territories including Delhi and Chandigarh.
It had a total of 172 branches and 174 ATMs as of June 30, 2023.
Capital Small Finance Bank Limited: Financials
Particulars/ Rs. Cr.
H1Fy24
H1Fy23
2303
2022
2021
Interest income
385.98
320.73
676.01
578.2
511
Interest expenses
215.01
169.37
354.02
322.9
313
NII
170.97
151.36
321.98
255.3
199
Other income
29.23
22.08
49.48
54.19
45.8
Net total income
200.21
173.44
371.46
309.5
244
Operating profit
75.38
67.25
148.7
113.2
71.5
Provisions
3.25
12.34
24.55
28.73
17.8
PBT
72.13
54.91
124.16
84.49
53.7
Net Profit
54.39
41.09
93.6
62.57
40.8
Adj Book value (Rs)
176.7
138.8
153.8
129.2
118
Post issue Share Cap
45.04
FV
10.0
IPO price
468.0
EPS Fy23
20.8
PE Fy23
22.5
EPS Fy24 (annualized)
24.2
PE Fy24 (annualized)
19.4
Market cap in cr
2,107.9
Post issue NAV
258.1
P/B post issue
1.8
Anchor: Capital SFB IPO
Capital SFB raised Rs 156.92 crore through its anchor book as it finalised allocation to total 19 anchor investors at a price of Rs 468 apiece. Anchor book included Nippon Life India, Ashoka India Equity Investment Trust, Whiteoak Capital, Ananta Capital Ventures Fund and LC Pharos Multi Strategy Fund among others. Out of the total allocation of 3,353,013 Equity Shares to the Anchor Investors 1,602,592 Equity Shares (i.e. 47.80% of the total allocation to Anchor Investors) were allocated to 3 Mutual Funds have applied through a total of 8 schemes.
Capital Small Finance Bank Limited: Salient Points
Existing investors including Oman India Joint Investment Fund, Amicus Capital, Amicus Capital Partners India Fund and others will offload up to 15,61,329 equity shares from their stake via offer-for-sale (OFS). They are only making a part exit.
Capital Small Finance Bank targets middle-income customer segments.
It has a retail focused liability franchise with a high share of CASA; secured and diversified advances portfolio.
Capital SFB intends to continue to grow the loan book organically with focus on secured lending. It intends to leverage technology and data analytics for scalability and profitable growth.
The net proceeds from the fresh stake sale shall be utilized towards augmenting the Bank’s Tier-I capital base to meet its future capital requirements.
In June 2023, company raised Rs. 50 cr. at Rs. 468 per share from Max Life Insurance which has come as a strategic partner.
As on September 30, 2023 and March 31, 2023 respectively, 99.85% and 99.82% of its loan book was secured with 84.26% and 85.16% of the loans secured by immovable properties.
Peers
AU Small Finance
596
11523
1589
13.8%
25.1
3.56
39,826
Equitas SFB
102
5994
781
13.0%
14.8
2.15
11,595
Suryoday SFB
179
1517
155
10.2%
12.3
1.03
1,898
Ujjivan SFB
58
6063
1261
20.8%
9
2.48
11,352
ESAF Small Fin
78.2
3664
409
11.2%
8.32
1.51
4,025
Capital SFB
468.0
798
107
13.4%
19.7
1.81
2,107.9
SFB
PE
P/adj BV
NNPA%
ROE
ROA
Loan growth %
Capital SFB
19.4
2
1.4
15
1.3
13
Jana SFB
10.5
1.5
0.9
13.1
1.5
35
AU SFB
31.1
4.4
0.6
13.7
13.7
24
Ujjivan SFB
12.9
2.6
0.1
27.8
3.2
26.9
Equitas SFB
15.9
2.3
1
13.7
1.9
37.1
Utkarsh SFB
12.9
2.2
0.2
16.7
2.3
26.4
ESAF
9.1
1.7
1.2
17.2
1.8
37
Suryoday SFB
12.2
1.1
1.5
1.4
28.7
Jana SFB IPO, which is open – Jana SFB, is priced at PBV of 1.3x on higher NIM of 7.8% and has better asset quality for a bigger loan book than Capital SFB IPO.
The other ongoing IPO , Jana SFB has assets of ₹21,000 crore and is the fourth largest bank in the SFB category, while Capital with ₹5,500 crore would be the smallest SFB on listing.
Capital SFB’s deposits are at a cost of 4.9%, which is the lowest among listed peers.
Capital SFB IPO is coming at a PE ratio of 16.9x (fy23 earnings) and 10.2x (fy24 annualized earnings.
The scrip is being offered at a price to Adj BV multiple of 2.0x at the upper price band.
My chances of applying in Capital SFB IPO are slightly less though it has some strengths. My preference among the current running main board IPOs remains Rashi, Jana, Capital SFB in this order.The IPO looks OK from a long term view. Plus point is that almost its full book is secured.
GMP as heard on Social Media may be around Rs. 55.
Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.