SBFC Finance IPO opens August 3, aims to raise Rs 1,025 Cr

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SBFC Finance IPO Opens August 3, Aims to Raise Rs 1,025 Crore

Singapore-based non-banking finance company, SBFC Finance, backed by Clermont Group, is set to make its debut in the stock market through an initial public offering (IPO) on August 3. The company aims to raise an impressive Rs 1,025 crore from the IPO.

The offering consists of fresh shares valued at Rs 600 crore, along with an offer for sale (OFS) of Rs 425 crore by the company’s promoters. Notably, shares will be offered for sale by Arpwood Partners Investment Advisors LLP, Arpwood Capital, and Eight45 Services LLP.

Investors will have until August 7 to subscribe to the public issue, while the anchor book will open for bidding on August 2.

The company is yet to disclose the price band for the offer, which will be revealed in the coming days.

SBFC Finance has reserved shares worth Rs 10.25 crore for its employees as part of the IPO. Before filing the red herring prospectus with the Registrar of Companies, the company already raised Rs 150 crore through a private placement of 2.72 crore equity shares. Consequently, the fresh issue size has been adjusted to Rs 600 crore.

The funds raised from the fresh issue will be utilized to bolster the company’s capital base, meeting potential future capital requirements due to business and asset growth.

Corporate promoters of SBFC Finance, including SBFC Holdings Pte Ltd, Clermont Financial Pte Ltd, Arpwood Capital, Arpwood Partners Investment Advisors LLP, and Eight45 Services LLP, currently hold an 80.48 percent stake in the company.

The company has demonstrated remarkable financial performance, recording a profit of Rs 149.74 crore for the fiscal year ending in March FY23, a substantial increase from Rs 64.8 crore in the previous year. Furthermore, revenue from operations grew by an impressive 38.5 percent to Rs 732.8 crore compared to the previous year.

The net interest income also witnessed a significant rise of 49 percent, reaching Rs 379 crore during the financial year, compared to Rs 254 crore in the previous year, although the net interest margin fell slightly by 7 basis points YoY to 9.32 percent.

SBFC Finance has maintained consistent improvement in asset quality, with gross non-performing assets (NPA) as a percentage of gross advances decreasing to 2.43 percent in FY23 from 2.74 percent in FY22. Similarly, net NPA dropped to 1.41 percent from 1.63 percent during the same period. Additionally, the provision coverage ratio improved to 42.04 percent from 40.44 percent in the same years.

As of March FY23, the company’s assets under management stood at Rs 4,942.8 crore, reflecting a robust growth of nearly 55 percent compared to Rs 3,192.2 crore in the previous financial year.

It’s worth noting that SBFC Finance had previously filed a draft red herring prospectus with the capital market regulator SEBI in March 2023, seeking approval for a reduced IPO size of Rs 1,200 crore. This proposal was granted approval last month. In the past, the company had filed IPO papers in November 2022, aiming to raise Rs 1,600 crore through a combination of fresh issue and offer for sale.

The merchant bankers for the current issue are ICICI Securities, Axis Capital, and Kotak Mahindra Capital, while KFin Technologies will serve as the registrar for the IPO.

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