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SBFC Finance, non-deposit-taking NBFC, has refiled its draft red herring prospectus (DRHP) with Securities and Exchange Board of India (SEBI) to reduce the initial public offer (IPO) size to ₹1,200 crore from ₹1,600 crore.
The fresh issue portion has been retained at issue of shares worth ₹750 crore, whereas the Offer for Sale (OFS) has been nearly cut to half to ₹450 crore from the earlier proposed ₹850 crore when the company had originally filed the DRHP in November 2022.
The OFS comprises sale of shares worth up to ₹208 crore by Arpwood Partners Investment Advisors LLP, ₹51 crore by Arpwood Capital, ₹41 crore by Eight45 Services LLP, and ₹150 crore by SBFC Holdings Pte. The offer also includes a reservation for subscription by eligible employees.
Original plans
It had earlier proposed sale of shares to the tune of ₹398 crore by Arpwood Partners Investment Advisors, ₹275 crore by SBFC Holdings Pte Ltd, ₹98 crore by Arpwood Capital, and ₹79 crore by Eight45 Services LLP.
SBFC Finance may consider issuing equity shares on a private placement basis, aggregating up to ₹150 crore prior to the IPO, in which case the fresh issue size will be reduced, it said.
The proceeds from the fresh issuance worth ₹750 crore will be used towards augmenting its capital base to meet future capital requirements. As of December 2022, the capital adequacy ratio stood at 33.23 per cent.
ICICI Securities, Axis Capital, and Kotak Mahindra Capital are the book-running lead managers and KFin Technologies Ltd is the registrar of the offer.
Business at a glance
The company grew at 40 per cent CAGR between FY19 and FY22. It provides finance — from 5 lakh to ₹30 lakh — to entrepreneurs, small business owners, self-employed and salaried individuals, and 82 per cent MSME Loan customers have a credit score over 700.
It has 137 branches in 105 cities across 16 States and 2 Union Territories and serves 94,997 customers. Revenue from operations stood at ₹529 crore in FY22. It incorporated a subsidiary, SBFC Home Finance, in December 2022, through which it intends to commence its affordable housing finance business.
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