Capital Small Finance Bank IPO

Capital Small Finance Bank Limited

₹14,240 /32 sharesMinimum Investment

Capital Small Finance Bank IPO Listing Details

Listed OnIssue PriceListing PriceListing Gains
BSE & NSE₹468.00₹435.00-₹33.00 (7.05%)

Capital Small Finance Bank IPO Details

Bidding DatesMin. InvestmentLot SizePrice Range
7 Feb ‘24 - 9 Feb ‘24₹14,24032₹445 - ₹468
Issue SizeIPO Doc
523.07Cr
RHP PDF

Subscription Status As on Invalid Date

  • Qualified Institutional Buyers
    6.64x
  • Non-Institutional Investor
    4.05x
  • Retail Individual Investor
    2.49x
  • Total
    4.00x

About Capital Small Finance Bank

Capital Small Finance Bank is a small finance bank offering a comprehensive suite of banking products. It was established in 1999 and has been operational as India's first small finance bank since 2016 after it got RBI approval. It focuses on serving the middle-income segment, particularly in rural and semi-urban areas. The bank's product range includes agricultural loans, MSME and trading loans, and mortgages such as housing loans and loans against property. The bank operates across Punjab, Haryana, Delhi, Rajasthan, Himachal Pradesh, and the Union Territory of Chandigarh, Capital Small Finance Bank and has a significant presence with 173 branches and 175 ATMs. The bank's approach is to provide accessible credit to its targeted customer base, primarily consisting of individuals with an average annual income of Rs. 0.04 crores to Rs. 0.5 crores. Capital Small Finance Bank focuses on secured lending, maintaining robust asset quality and expanding its reach through both physical branches and digital channels.;
Parent Organisation
Capital Small Finance Bank Limited
Founded
1999
Managing Director
Mr. Sarvjit Singh Samra

Strengths & Risks

  • Capital Small Finance Bank has been consistently maintaining a high Current Account Savings Account (CASA) ratio, increasing from 40.08% in Fiscal 2021 to 41.88% in Fiscal 2023.
  • The bank’s loan portfolio is predominantly secured by immovable properties. This allows it to control credit risk. The bank also maintains a well-diversified portfolio across agricultural, MSME, trading, and mortgage lending.
  • Capital Small Finance Bank Consistent has a positive growth track record. Its operating profit CAGR rose 44.23% from Rs. 71.49 cr in Fiscal 2021 to Rs. 148.70 cr in Fiscal 2023. It was Rs. 75.38 cr as of the six months ended September 30, 2023.
  • The company has managed to expand its loan book, with advances in agriculture, MSME, trading, and mortgages segments totaling Rs. 2,266.9 crores, Rs. 1,153.4 crores, Rs. 1,528.8 crores.
  • The bank has focused on fulfilling PSL (priority sector lending) targets as prescribed by RBI, particularly in the agricultural sector. This emphasis aligns with its commitment to financial inclusion and also provides a strategic avenue for diversification and risk mitigation. Its PSL advance increased at a CAGR of 17.16% from Rs. 2,579.25 cr as on March 31, 2021 to Rs. 3,540.33 cr as on March 31, 2023 and to Rs. 3,684.43 cr as on September 30, 2023.
  • Capital Small Finance Bank is the only SFB to be empanelled with the Food Civil Supplies and Consumer Affairs Department, Government of Punjab. It serves as the central banking entity responsible for facilitating the disbursement of payment for the acquisition of food grains to the recipients.
  • In the past, Capital Small Finance Bank had to resolve a situation with SEBI concerning the allotment of Equity Shares to more than 49 investors, paying a settlement fee of Rs. 0.058 cr and a compounding fee of Rs. 0.08 cr. Continued compliance challenges may pose risks to the business.
  • The bank's contingent liabilities, mainly due to guarantees given on behalf of customers, totalled Rs. 52.92 cr as of September 30, 2023. A materialisation of these liabilities could significantly impact the bank's finances.
  • RBI's declaration of the bank's statutory auditors as ineligible for FY 2024 poses a risk to timely and compliant financial reporting and auditing processes.
  • The inability to trace certain form filings and shareholder resolutions, particularly for allotments made on January 12, 2000, raises concerns about regulatory compliance and record-keeping.
  • Past delays in reporting foreign investment and equity share issuance, for which a fine of Rs. 0.005 cr was imposed by RBI, indicate potential systemic issues in the bank's reporting and compliance framework.
  • Ongoing legal proceedings, including criminal, tax, regulatory, and civil cases, could result in financial liabilities and reputational damage. The total amount involved in litigation against the bank is Rs. 63.39 cr.
  • The bank's significant operation in rural and semi-urban areas ties its performance closely to the economic conditions of these regions. This makes the investment profitability susceptible to localised economic downturns and sector-specific risks.
  • The bank's Gross NPA ratio was 2.73% as of September 30, 2023, with a provision coverage ratio of 50.96%. Effective management of NPAs is critical to maintaining financial stability.
  • As of December 31, 2023, the bank's total indebtedness stood at Rs. 529.51 cr, comprising Rs. 265.78 cr in secured borrowings and Rs. 263.73 cr in unsecured borrowings. An inability to manage these debts may impact its growth and profitability.
  • The bank's Cost to Income Ratio was 62.35% for the six months ended September 30, 2023. This metric indicates the efficiency of the bank's operations, where a higher ratio can suggest lower profitability and operational inefficiencies.

Financials

*All values are in Rs. Cr
No Graph Data To Display

Application details

Apply asPrice bandApply upto
Regular445 - 468₹2 Lakh
High Networth Individual445 - 468₹2 - 5 Lakh
For Capital Small Finance Bank IPO, eligible investors can apply as Regular.
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