Capital Small Finance Bank Limited IPO is going live for subscription from 7th Feb to 9th Feb 2024. The Jalandhar-based local bank is the first small finance bank in India since it got its approval from the RBI in 2016. The bank offers MSME loans, loans against property and housing loans and its main focus is to provide for middle-income customers in rural and semi-urban Punjab.
The stock of this small finance bank will be offered at a price band of Rs. 445 to Rs. 468 per share. The shares will be listed on the BSE and NSE on 14th February 2024. Before applying for this IPO, consider going through the following details to know more about the issue.
Additional Read: Capital Small Finance Bank Ltd IPO Details
Table of Content
Capital Small Finance Bank IPO Details
These are the essential details of the Capital Small Finance Bank IPO:
| IPO Open Date | 7th February 2024, Wednesday |
| IPO Close Date | 9th February 2024, Friday |
| Issue Type | Book Built Issue IPO |
| Face Value | Rs. 10 per share |
| Price Band | Rs. 445 to Rs. 468 per share |
| Minimum Lot Size | 32 equity shares |
| Total Issue Size | Amount aggregating up to Rs. 523.07 crore |
| Fresh Issue | Amount aggregating up to Rs. 450.00 crore |
| Offer for Sale | Amount aggregating up to Rs. 73.07 crore |
About the Company
Established in 1999, Capital Small Finance Bank Limited is the first small finance bank in India which got the approval from RBI in 2016 to offer banking services. This bank targets customers from semi-urban and rural areas with medium incomes. It offers MSME loans, trading, agricultural, housing loans and loans against property.
The bank has 175 ATMs and 173 branches across Haryana, Punjab, Rajasthan, Delhi, Chandigarh and Himachal Pradesh. The bank focuses on maintaining asset quality, and secured lending. Currently, the small finance bank is focusing its efforts on expanding its reach through digital channels and physical branches.
The company is issuing fresh shares in this IPO to use the funds to fulfil the capital requirement for the future in increasing the Tier-I capital base. The Capital Small Finance Bank Limited IPO will remain open for subscription from 7th Feb to 9th Feb 2024.
Capital Small Finance Bank IPO Timeline
These are the timelines that you must know before applying for the Capital Small Finance Bank Limited IPO:
| IPO Open Date | 7th February 2024, Wednesday |
| IPO Close Date | 9th February 2024, Friday |
| Cut-off Time for UPI Mandate confirmation | 9th February 2024 at 5 PM |
| Basis of Allotment | 12th February 2024, Monday |
| Initiation of Refunds | 13th February 2024, Tuesday |
| Credit of Shares to Accounts | 13th February 2024, Tuesday |
| Listing Date | 14th February 2024, Wednesday |
Capital Smal Finance Bank IPO Lot Size
Follow this table to know the lot size of the issue:
| Application | Lots | Shares | Amount |
| Retail Investor Minimum | 1 | 32 | Rs. 14,976 |
| Retail Investor Maximum | 13 | 416 | Rs. 1,94,688 |
| Small HNI (Minimum) | 14 | 448 | Rs. 2,09,664 |
| Small HNI (Maximum) | 66 | 2,112 | Rs. 9,88,416 |
| Big HNI (Minimum) | 67 | 2,144 | Rs. 10,03,392 |
Strengths of the Company
Before applying for the Capital SFB IPO, you must know the company’s core strengths:
- Capital Small Finance Bank Limited has maintained a high CASA (Current Account Savings Account) ratio. In 2021 it was 40.08% and in 2023 it increased to 41.88%
- The bank mainly focuses on building its loan portfolio with more secured loans by immovable collaterals. The loan is well-diversified among MSME, agricultural, mortgage and trading loans.
- Capital Small Finance Bank has a positive track record in terms of CAGR. The operating profit was Rs. 71.49 crore in 2021, and Rs. 148.70 crore in 2023. As of Sep 30 2023, it was Rs. 75.38 crore.
- The total loan book is very strong where the total agriculture loan is Rs. 2,266.9 crore. The total MSME loan is Rs. 1,153.4 crore. Meanwhile, the total trading and mortgage segment loan stood at Rs. 1,528.8 crore by the end of September 2024.
- To minimise the risk of lending this bank focuses on Priority Sector Lending (PSL) as prescribed by RBI in the agricultural sector. The PSL advance of this small finance bank increased with a CAGR of 17.16%. (PSL advance was Rs. 2,579.25 crore on 31st March 2021, Rs. 3,540.33 crore on 31st March 2022 and Rs. 3,684.43 crore as on 30th Sep 2023).
Also Read: How Can You Analyse An IPO?
Risks Involved
Every IPO investment has some risk factors. These are the facts you should know before placing your bids in Capital Small Finance Bank Limited IPO:
- In the past, Capital Small Finance Bank Limited has paid a settlement fee of Rs. 0.058 crore with a compounding fee of Rs. 0.08 crore to resolve a case with SEBI for allotting equity shares to more than 49 investors. If such a situation happens again, it may create risks to the business and its reputation.
- The bank may face concerns about record-keeping and regulatory actions as some shareholding resolutions and form filings (especially about allotments) have been untraced since 12 Jan 2000.
- The bank is involved with some legal proceedings such as civil, regulatory, tax and criminal cases. The total amount involved is Rs. 63.39 crore against the bank.
- The cost-to-income ratio is 62.35% as of 30th Sep 2023. A higher ratio indicates operational inefficiencies and lower profitability.
Also Read: Risk of investing in IPO
Summary
Hopefully, at this point, you have an overall idea about the Capital Small Finance Bank Limited IPO. The Rs. 523 crore IPO involves both a fresh issue and an offer for sale. It will be live for subscription on 7th February and the last date is 9th February for subscription. If you are going to apply for this IPO, make sure you have checked all the details mentioned in the RHP document.
Frequently Asked Questions
The fresh issue size is Rs. 450 crore out of a total IPO size of Rs. 523 crore.
Nuvama Wealth Management Limited, DAM Capital Advisors Limited and Equirus Capital Private Limited are book-running lead managers of this IPO.
Link Intime India Private Limited is the registrar of Capital Small Finance Bank Limited IPO
Amicus Capital Private Equity I LLP, Oman India Joint Investment Fund II, and Amicus Capital Partners India Fund I are the main selling shareholders of this IPO.
