Jana Small Finance Bank refiles draft papers with Sebi to launch its IPO

Jana Small Finance Bank has filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) to launch funds through an initial public offering (IPO). The company is looking to raise Rs 575 crore through the sale of fresh equity shares.

The issue also includes an offer-for-sale (OFS) aggregating up to 4.05 million equity shares by Investor shareholders including Client Rosehill, CVCIGP II Employee Rosehill, Global Impact Funds, Growth Partnership II Ajay Tandon CoInvestment Trust, Growth Partnership II Siva Shankar CoInvestment Trust and Hero Enterprise Partner Ventures.

The net proceeds from the fresh issue are proposed to be utilised towards augmentation of Bank’s Tier – I capital base, to meet future capital requirements such as organic growth and expansion and to comply with the regulatory requirements, along with general corporate purposes. Proceeds from the fresh stake sale will go to selling shareholders.

The bank, in consultation with the lead managers, can consider a pre-IPO share allotment not exceeding Rs 115 crore. In such case, the fresh issue size will be slashed. According to Fitch Report, Jana Small Finance Bank Limited is fourth largest small finance Bank in terms of AUM and the fourth largest small finance bank in terms of deposit size as at March 31, 2023.

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As at March 31, 2023, Jana Small Finance had 754 banking outlets, including 272 banking outlets in unbanked rural centres, in 22 states and two union territories. As of March 31, 2023 Jana Small Finance Bank has served nearly 1.2 crore customers since 2008, including 45.7 lakh active customers.

The lender will allocate 50 per cent of shares to the qualified institutional bidders, while non-institutional investors will get 15 per cent of allocations. Remaining 35 per cent of shares shall be allocated towards the retail investors.

Axis Capital, ICICI Securities and SBI Capital Markets are the book-running lead managers to the issue, while KFin Technologies has been appointed as the registrar.

The lender commenced operations as a small finance bank in March 2018. In April 2021, Jana filed for an IPO but had to delay its fundraising plan due to the pandemic. The Reserve Bank of (RBI) India mandates that all small finance banks have to list within five years of starting operations.

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