Capital Small Finance Bank IPO - Review, Valuation, Date & GMP

Capital Small Finance Bank IPO  - Complete Overview

Founded in 1999, Capital Small Finance Bank Limited is a bank that specialises in small finance. In 2015, it made history by becoming the first non-NBFC microfinance entity to obtain the SFB licence. The bank has a strong presence in semi-urban and rural areas, operating through a branch-based model.

Their main goal is to serve middle-class families with an annual income ranging from forty thousand to five lakhs. They mainly provide loans to these middle-class families, especially for things like farming, small businesses, and trading. Most of these loans are secured by property. They have physical branches and also offer online banking services.

The bank is headquartered in Jalandhar, Punjab, and operates in the north of India, with over 170 branches and ATMs. As of March 31, 2023. As of June 30, 2023, the bank employed 1827 people. The bank just offered shares to the public for the first time (IPO). They are a well-established bank in the small finance sector and are looking to grow even more.

Capital Small Finance Bank IPO Overview

Capital Small Finance Bank IPO date is slated to be open for subscription from February 7, 2024, to February 9, 2024. This BSE NSE IPO follows a Book Built Issue IPO.

Capital Small Finance Bank IPO price is fixed at Rs.445 to Rs.468 per share. 

The total issue size of this IPO amounts to Rs.523.07 CR. The company has reserved 50% for institutional investors, 15% for non-institutional investors, and 35% for retail investors. 

 

Capital Small Finance Bank IPO timetable (Tentative)

Events	Date
IPO Opening Date	7 February 2024
IPO Closing Date	9 February 2024
IPO Allotment Date	12 February 2024
Refund initiation	13 February 2024
IPO Listing Date	14 February 2024

 

Capital Small Finance Bank IPO Details

IPO Opening & Closing Date	7 February to 9 February 2024
Face Value	Rs.10 per share
Issue Price	Rs.445 to Rs.468  per share
Lot Size	32 Shares
Price of 1 lot	Rs.14,976
Total Issue Size	11,176,713 shares (aggregating up to Rs.523.07 CR)
Offer for sale	1,561,329 shares of Rs.10 (aggregating up to Rs.73.07 CR)
Fresh issue	9,615,384 shares (aggregating up to Rs.450.00 CR)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Link Intime India Private Ltd

 

Capital Small Finance Bank IPO Lot Details

Application	Lot	Shares	Amount
Minimum Lot Investment (Retail)	1 lot	32	Rs.14,976
Maximum Lot Investment (Retail)	13 lot	416	Rs.1,94,688
Minimum Lot Investment (HNI)	14 lot	448	Rs.2,09,664
Maximum Lot Investment	66 lot	2,112	Rs.9,88,416

 

 

Capital Small Finance Bank IPO Reservation

QIB Shares Offered	Maximum 50%
Retail Shares Offered	Minimum 35%
Other Shares Offered	Minimum 15%

 

Company Financial

As of Sep 30, FY 23, the company has shown positive financials and stable borrowings compared to previous fiscal years.

(Amount in Crore)

Period	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Total Assets	8,390.69	7,990.77	7,153.92
Total Revenue	415.22	725.48	632.40
PAT	54.39	93.60	62.57
Net worth	711.76	610.61	515.78
Reserve & Surplus	676.41	576.36	481.74
Total Borrowings	572.76	721.38	498.43

 

State-wise Branches of our Bank

Most of their bank branches are in Punjab followed by other states.

(in % age)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Punjab	86.13%	87.06%	88.82%
Haryana	9.25%	8.24%	6.83%
Chandigarh	1.16%	1.18%	1.24%
Delhi	1.73%	1.76%	1.86%
Rajasthan	1.16%	1.18%	1.24%
Himachal Pradesh	0.58%	0.59%	NA
Total	100.00%	100.00%	100.00%

 

Private Players comparison

Capital SFB is doing well compared to other banks in terms of attracting deposits, having a good mix of current and savings accounts, and offering competitive interest rates on savings.

(in % age)

Particulars	Growth in deposits (FY20 - H1FY24)	CASA	Interest rate offered on Savings Account
HDFC Bank	20.01%	38.00%	3.00%
ICICI Bank	10.40%	48.41%	3.00%
Axis Bank	12.85%	44.00%	3.00%
Kotak Mahindra Bank	13.13%	48.30%	3.50%
IndusInd Bank	17.92%	39.34%	3.50%
IDBI Bank	2.24%	51.49%	3.00%
Federal Bank	12.90%	31.17%	3.45%
Jammu & Kashmir Bank	7.65%	50.61%	2.90%
IDFC First Bank	36.44%	46.41%	3.00%
Bandhan Bank	21.26%	38.54%	3.00%
RBL Bank	13.40%	35.74%	4.25%
Karur Vysya Bank	10.23%	32.26%	2.25%
City Union Bank	7.57%	29.57%	3.00%
DCB Bank	12.24%	25.04%	1.75%
CSB Bank	14.59%	29.28%	2.10%
Nainital Bank	0.48%	-	2.85%
Capital SFB	13.84%	37.76%	3.50%

 

Revenue by Operations

Capital Small Finance Bank's revenue from operations increased in FY 23 compared to FY 22.

(Amount in Crore)

Particulars	Sep 30, FY 23	Mar 31, FY 23	Mar 31, FY 22
Interest Earned	3,85.98	6,76.00	5,78.21
Other Income	29.23	49.47	54.18
Total	415.21	725.48	632.40

 

 

 

The Objective of the Issue

The company intends to use the net proceeds for the following objectives.

 

Promoters and Management of Capital Small Finance Bank IPO

1. Sarvjit Singh Samra.

2. Amarjit Singh Samra.

3. Navneet Kaur Samra.

4. Surinder Kaur Samra.

5. Dinesh Gupta.

Pre-issue Promoter Shareholding	24.01%
Post-issue Promoter Shareholding

 

Capital Small Finance Bank IPO Lead Managers

•  Nuvama Wealth Management Limited.

• Dam Capital Advisors Ltd. 

• Equirus Capital Private Limited.

 

Peers of Capital Small Finance Bank IPO

Capital Small Finance Bank's IPO exhibits a competitive P/E ratio and EPS compared to its peers in the small finance banking sector.

Name of the Company	Face Value (Rs. per share)	P/ E	EPS (Basic) (Rs.)
Capital Small Finance Bank Limited	10	17.11	27.35
Idfc First Bank Ltd	10	21.76	3.91
Au Small Finance Bank Ltd	10	33.40	21.86
Equitas Small Finance Bank Limited	10	24.13	4.71
Ujjivan Small Finance Bank Limited	10	9.97	5.82
Suryoday Small Finance Bank Limited	10	24.08	7.32
Esaf Small Finance Bank Limited	10	10.33	6.73

 

 

Evaluation

The IPO is priced within the range of Rs. 445 to Rs.468  per share.

Evaluation of P/E Ratio:

- Considering the FY23 EPS of Rs 27.35 from the last year, the resulting P/E ratio is 17.11x.

- Taking into account the weighted EPS of Rs 21.82 for the last three years, the P/E ratio amounts to 21.45x.

    

Comparative Analysis with Listed Peers:

- The highest P/E ratio among peers is 29.12x.

- The lowest P/E ratio among peers is 9.51x.

- The industry's average P/E is 19.32x.

 

As a result, the IPO price range, with a P/E ratio ranging from 17.11x to 21.45x, seems neutral in comparison to the industry average of 19.32.

 

Dividend Policy

The company hasn't paid dividends in past fiscal years. Whether we can pay them in the future depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by our Board.

 

IPO's Strengths

• Focus on regular people's banking needs.

• Diverse and secure loan portfolio.

• Efficient credit assessment and risk management.

• Puts customers first, understands their needs.

• Consistently growing and improving.

 

IPO's Weaknesses

• Most branches in North India, particularly Punjab.

• Strict rules and regulations to follow.

• Significant indebtedness as of December 31, 2023.

• Need to meet RBI requirements for cash flow.

• The bank had problems with negative cash flows in previous years. 

 

 

IPO GMP Today

The latest GMP of Capital Small Finance Bank IPO is Rs. 0.

 

Conclusion

Capital Small Finance Bank's IPO presents a well-established bank in the small finance sector, focusing on the middle-class population. The company exhibits positive financial trends, stable borrowings, and a competitive position among its peers. It reflects a neutral stance in comparison to industry averages. However, potential investors should consider the bank's regional concentration and adherence to regulatory requirements.

 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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