ESAF Small Finance Bank IPO

ESAF Small Finance Bank Ltd.

ESAF Small Finance Bank IPO Details

Bidding DatesMin. InvestmentLot SizePrice Range
To be announced------
Issue SizeIPO Doc
629.00Cr
DRHP PDF

About ESAF Small Finance Bank

ESAF Small Finance Bank Limited is one of the leading small finance banks (SFB) in India in terms of client base size, the yield on advances, net interest margin, assets under management CAGR, total deposit CAGR, loan portfolio concentration in rural and semi-urban areas, and the ratio of microloan advances to gross advances. The bank has around 46.8 lakh customers and around 550 Branches, 421 customer service centers, 12 business correspondents, 158 banking agents, and 327 ATMs in 21 states and two union territories.;
Parent Organisation
ESAF Small Finance Bank Ltd.
Founded
2016
Managing Director
Kadambelil Paul Thomas

Strengths & Risks

  • Although based in Kerala, its deep understanding of the microloan segment has allowed the bank to grow across India.
  • Highest percentage of gross advances from rural and semi-urban areas as of March 31, 2020, among the compared small finance banks.
  • Fast-growing retail deposit portfolio with low concentration risk.
  • Strong customer connections that are driven by its customer-centric products and processes and other non-financial services for microloan customers.
  • Technology-driven model with an advanced digital technology platform.
  • Significant dependence on microloans and the microfinance sector.
  • Over the last three years, more than 85% of the advances were unsecured.
  • High operating expenses.
  • Dependency on ESMACO for promotion and new business.
  • Dependency on business correspondents for sourcing and servicing of customers for microloans.
  • Inability to comply with the applicable laws, regulations, and norms.
  • Inability to control the level of NPAs in its portfolio effectively or improve its provisioning coverage as a percentage of gross NPAs.
  • Impact of volatility in interest rates causing the net interest margin to decline.
  • An ongoing criminal investigation against an individual promoter – Kadambelil Paul Thomas.
  • Negative publicity about the brand, third parties who use the “ESAF” brand, including the corporate promoter, and third parties whose products ESAF distributes.
  • Failure to enforce its intellectual property rights or inability to renew its trademark licensing agreement.
  • Geographical concentration in southern India.
  • Inability to secure funding on acceptable terms and at competitive rates when needed.
  • Competitive industry.

Financials

*All values are in Rs. Cr
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Application details

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