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Non-Banking Finance Company (NBFC) SBFC Finance has filed its Draft Red Herring Prospectus (DRHP) with the capital markets regulator to float its IPO.
Small Business Fin Credit India is a non-deposit-taking NBFC that caters to the credit needs of MSMEs. Its clients are mainly small entrepreneurs, self-employed individuals, etc. mostly in Tier-2 and Tier-3 cities. It has partnerships with ICICI Bank, Kotak Mahindra Bank, State Bank of India, and others.
According to its website, it has a customer base of over 285,000, 135 branches all over India in 126 cities, an employee headcount of over 2,500, and Assets Under Management (AUM) of over Rs 4,100 crores.
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The IPO, which plans to raise Rs 1,600 crores is a combination of fresh issues and OFS. The company will be receiving Rs 750 crores from the issue while the balance of Rs 850 crores will be an OFS where promoters Arpwood Partners Investment Advisors LLP, SBFC Holdings, Arpwood Capital, and Eight45 Services LLP will be offloading their stakes.
Moreover, the company is also said to be considering a pre-IPO placement of Rs 150 crores, which if completed would result in a reduction in the public issue size.
Half of the issue will be reserved for Qualified Institutional Investors, 15% for Non-Institutional Investors, and the remaining 35% for Retail Investors. Other details like the price bands, time, duration, etc. will be announced upon receipt of approval from the regulator.
The company will be utilizing the proceeds of the issue towards improving its capital base to meet its future capital requirements for its growth plans. Moreover, the company also anticipates that the funds proposed to be raised will be sufficient to satisfy its Tier requirements.
ICICI Securities, Axis Capital, and Kotak Mahindra Capital are the book-running lead managers to the public issue. KFin technologies will serve as the registrar of the issue.
Article by Aman Agarwal.
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