Jana SFB IPO Review

Jana SFB IPO envisages to raise Rs 570.00 crores. The issue is a combination of fresh issue of 1.12 crore shares aggregating to Rs 462.00 crores and offer for sale of 0.26 crore shares aggregating to Rs 108.00 crores. Jana Small Finance Bank which earlier operated as NBFC has has been operating since March 2018 as a small finance bank (SFB)

IPO opensFeb 07, 2024
IPO ClosesFeb 09, 2024
IPO Size (Rs.)₹570 Cr.
IPO Size (shares) 13,768,049 shares
BreakupFresh issue ₹462.00 Cr + OFS ₹108.00 Cr
Face Value:₹10 per share
IPO Price in Rs.₹393 to ₹414 per share
Minimum Lot36 Shares
Listing AtNSE , BSE
QIB ~50 %
NII Quota~15
Retail Quota~35%
 Lead ManagerAxis Capital, ICICI Securities, SBI Capital Markets

About Jana Small Finance Bank Limited | Jana SFB:

  • Jana Small Finance Bank (“Jana SFB”) was incorporated as ‘Janalakshmi Financial Services Private Limited’ in 2006, at Bengaluru.
  • It started operating as a Small from 2018.
  • Jana SFB is the 4th largest Small
  • Finance Bank in terms of AUM and the 4th largest Small Finance Bank in terms of deposit size as at September 30, 2023.
  • The Bank has 771 banking outlets, including 278 banking outlets in unbanked rural centres, in 22 states and 2 union territories
  • It has 4.87 million active customers as at September 30, 2023.
  • The bank’s primary secured loan products are secured business loans, micro loans against property (“Micro LAP”), MSME loans, affordable Housing loans, term loans to NBFC, loans against FD, 2 wheeler loans, and gold loans.
  • They also act as corporate agent for third-party life insurance products, general (non-life) insurance products and health insurance products,
  • Their group loans follow the Joint Liability Group model and are specifically tailored for groups of women.

Jana Small Finance Bank Limited | Jana SFB: Financials

Particulars (₹ in cr.)2023 (06)2022 (06)202320222021
Advances Net21,008.7014,642.7017,759.6013,006.7011,599.70
Interest Earned1,863.901,396.203,075.002,726.502,497.70
Net Profit213.255.625617.572.3
Equity Share Capital343.5325325201.4200.7
Net worth2,569.001,595.001,777.101,184.601,100.80
Net Interest Margin (%)2.40%6.80%7.70%7.30%8.40%
Gross NPAs (%)2.40%6.80%3.90%5.70%7.20%
Net NPAs (%)0.90%4.60%2.60%4.00%5.30%
EPS – Basic (₹)33.310.547.53.414.3
EPS – Diluted (₹)29.59.842.63.213.5
RoNW (%)8.40%3.50%14.40%1.50%6.60%
NAV (₹)346.4286.9323.2230.4217
Post issue Share Capital104.59    
IPO price414.0    
EPS Fy2324.5    
PE Fy2316.9    
EPS Fy24 (annualized)40.8    
PE Fy24  (annualized)10.2    
Market cap in cr4,330.0    
Post issue NAV298.52    
P/B post  issue1.4    

Anchor: Jana Small Finance Bank Limited | Jana SFB IPO

Out of the total allocation of 40,32,588 Equity Shares to Anchor lnvestors 2,47,560 Equity Shares (i.e, 6 % of the total
allocation to Anchor lnvestors) were allocated to 1 domestic mutual fund (Bandhan) through a total of 2 schemes,

Jana Small Finance Bank IPO | Jana SFB IPO: Salient Points

  • Promoter shareholding would decline to 22.5% post IPO from 25.2% pre-IPO even as they are not part of OFS.
  • Some notable shareholders of bank include TPG, HarbourVest Group, Amansa Capital, Morgan Stanley and Hero Ventures and many other small shareholders. OFS of 108 cr is PE investors Client Rosehill and Hero Ventures whose combined stake will be reduced by about half.
  • Ajay Kanwal, MD and CEO of the bank, has more than 33 years’ experience in financial services. He was earlier Regional CEO, ASEAN and South Asia at Standard Chartered Bank in India and Singapore.
  • Jana Small Finance Bank Limited acts as a corporate agent for third-party life insurance products, general (non-life) insurance products and health insurance products.
  • The bank also offers Point of Sales (POS) terminals and payment gateway services through merchant acquiring partners.
  • Further to the bank delivering products and services through banking outlets and ATMs, the bank delivers products and services through business correspondents, ATM cum debit cards, mobile banking platforms, internet banking portals and SMS alerts.
  • Peers
Jana SFB10.51.50.913.11.535
AU SFB31.14.40.613.713.724
Ujjivan SFB12.
Equitas SFB15.92.3113.71.937.1
Utkarsh SFB12.
Suryoday SFB12.21.11.5 1.428.7
  •  The bank dis a pre-IPO placement of 24.39 lakh equity shares in January 2024 at an issue price of Rs 414 aggregating to Rs 101 crore. This is same as present IPO price.
  • CASA deposits ratio of bank is low at 20.5% and it relies more on Bulk deposits.
  • Unsecured microfinance loans of the bank accounts for 42.3% of loan book end September 2023.
  • Among SFBs, Jana Small Finance Bank is the he fourth-largest small finance bank based on both assets under management (AUM) and deposit size.
  • Jana Small Finance Bank IPO | Jana SFB IPO is coming at a PE ratio of 16.9x (fy23 earnings) and 10.2x (fy24 annualized earnings.
  • I intend to apply in Jana Small Finance Bank IPO | Jana SFB IPO. Returns in my view should be average.
  • GMP as heard on Social Media may be around Rs. 51.
  • 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.

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