Ujjivan Small Finance Bank hopes to raise ₹750 crore through an initial public offering, which will also bring down the promoter stake in the lender to about 85 per cent.
The IPO with a price band of ₹36-37 an equity share will open on December 2 and close on December 4.
Ahead of the share-sale, the bank has already raised ₹250 crore in a pre-IPO placement of 7.14 crore shares.
“After the IPO, the promoters holding will come down from 100 per cent to 84 per cent to 85 per cent,” Samit Ghosh, Managing Director, Ujjivan SFB, said on Wednesday.
ALSO READ: Ujjivan SFB starts listing work
The SFB is also in talks with the RBI for a review of norms to dilute promoter holding to 40 per cent by 2022.
Ghosh said the bank is in discussions again with the RBI about reverse merger at the end of five years having been rejected the reverse merger plan by the central bank earlier.
Ujjivan SFB had commenced operations in February 2017, and under RBI norms, SFBs have to list within three years of operations and the promoter shareholding should be lowered to 40 per cent in five years.
ALSO READ: IPO fever: After IRCTC’s success, will the capital market see more big-ticket public issues?
Ghosh said the bank has a back-up plan alternatively to lower promoter shareholding to 40 per cent and will consider options such as an offer-for-sale or acquisition. “After the IPO, we will talk with the RBI about reducing promoter stake. Alternatively, we will look at OFS or acquisition but all this is possible only after one year of the IPO.”
Universal banking licence
Ghosh also said Ujjivan SFB can apply for a universal banking license after six years of operation in order to bring down its capital adequacy requirement.
“However, our strategy to focus on mass market and serving the unserved and under-served will not change,” he said, adding that it is still early days for the proposal.
Under RBI norms, an SFB has to maintain a minimum capital adequacy ratio of 15 per cent of its risk weighted assets on a continuous basis.