IPO

Suryoday Small Finance Bank Ltd IPO

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Object of the Offer

The offer, incl. employee reservation (0.05 cr shares; discount of ₹30), comprises of a Fresh Issue of ~₹248 cr and an Offer for Sale of ~₹333 cr aggregating to ₹581 cr at upper price band. Proceeds from Fresh Issue are proposed to be utilized towards augmenting the bank’s Tier I capital base to meet its future capital requirements such as organic growth and expansion and to comply with regulatory requirements for enhanced capital base.


Shareholding pattern for Suryoday Small Finance Bank

Share Reservation

Net Issue (%)

Promoter and Promoter Group

30.35

Public

69.65

Source: RHP

Suryoday Small Finance Bank Ltd IPO Subscription Details

Company

Suryoday Small Finance Bank Ltd

Issue Type

Book Building

Issue Size (In ` Crore)

₹582.34

Lot Size

49 equity shares

Open Date

17 March, 2021

Close Date

19 March, 2021

Offer Price

₹303 to ₹305 per equity share

DRHP

Click here

Subscription Status

Category Subscription Status Shares Offered
Qualified Institutional 2.18 Times 3,718,614
Non Institutional 1.31 Times 2,788,961
Retail Individual 3.09 Times 6,507,575
Employee 0.34 Times 500,000
Others - -
Total 2.37 Times 13,515,150

Suryoday Small Finance Bank ipo Subscription status (Day by Day)
Date QIB NII Retail Employee Total
Mar-17-2021 5.00 Pm 0.00x 0.04x 0.84x 0.06x 0.42x
Mar-18-2021 5.00 PM 0.0x 0.20x 2.00x 0.17x 1.01x
Mar-19-2021 2.18x 1.31x 3.09x 0.34x 2.37x






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About Suryoday Small Finance Bank Ltd IPO

Suryoday Small Finance Bank Ltd (SSFB) is one of the leading SFBs in India in terms of net interest margins, return on assets, yields and deposit growth and had the lowest cost-to-income ratio among SFBs in India in FY20. (CRISIL Report). SSFB has presence across 13 states and union territories, with customer base standing at 1.44 million and service them through their 4,770 employees and 554 banking outlets as of Dec 31, 2020. Prior to commencing SFB operations, SSFB operated as an NBFC – MFI and operated the joint liability group (JLG)-lending model for providing collateral-free, small ticket-size loans to economically active women belonging to weaker sections. Its asset portfolio consists of inclusive finance portfolio (loans to JLG), CV loans, affordable housing loans, micro business loans, unsecured MSEs and SME loans, secured business loans, financial intermediary group loans and other loans. Liability side products comprise of CASA, salary savings accounts and a variety of deposit accounts including RDs and FDs sourced from customers across India. SSFB also offers other banking facilities, products and services to generate non-interest income. As of Dec 31, 2020, its Gross Advances stood at ₹3,908 cr, deposits stood at ₹3,344 cr, while retail deposits comprised 72.4% of total deposits, CASA as a percent of overall deposits was 13.32%, CRAR was 41.17 % (Tier I capital of 36.94%), GNPA were 0.78 % of Gross Advances and NNPA were 0.33% of net advances.


Suryoday Small Finance Bank - Financials

( Cr., except percentages)

FY18

FY19

FY20

9MFY20

9MFY21

Advances

1,569

2,680

3,532

3,361

3,782

Total Disbursements

1,709

2,856

3,090

2,313

1,160

Total Assets

2,156

3,761

5,365

4,589

6,350

Total Deposits

750

1,593

2,849

2,491

3,344

Net Worth

538

880

1,066

1,075

1,191

Total Income

325

597

854

626

689

Net Interest Income

166

340

491

361

353

Net Interest Margin (%)

10.4

12.8

11.9

12.3*

8.5*

PAT

11

90

111

127

55

Return on average equity (%)

2.3

14.8

11.3

17.6*

6.3*

Return on average assets (%)

0.7

3.2

2.5

4.0*

1.2*

Yield on average interest-earning assets

18.0

19.9

18.6

21.1*

19.8*

Cost of Funds

10.7

9.0

8.6

8.8*

8.1*

Cost to income ratio (%)

64.4

46.8

47.1

44.4

55.4

GNPA (%)

3.5

1.8

2.8

2.8

0.8

NNPA (%)

1.9

0.4

0.6

0.5

0.3

CASA Ratio (%)

11.0

11.3

11.5

11.9

13.3

Retail term deposit / total term deposit ratio (%)

33.9

35.7

48.6

45.3

68.2


Strengths:

  • Customer centric approach with a focus on financial inclusion
    SSFB is commercial bank focused on serving customers in the unbanked and underbanked segments in India. Its inclusive finance portfolio (comprising loans to JLGs) accounted for 70.35% of Gross Loan Portfolio, as of December 31, 2020. The company’s business model has transitioned over the years, initially operating as a NBFC – MFI before commencing SFB operations in 2017, its core focus has been to serve unbanked and underbanked customers. 
    SSFB believes that among its core strengths is the ability to customize products that cater to the requirements of customers. On the asset side, they offer overdraft facility (Smile OD) for existing inclusive finance customers who are regularly servicing their dues and help them in meeting their additional working capital requirements. On the liability side, they offer their existing inclusive finance customers with savings bank accounts and recurring deposit product, ensuring that they earn from their savings and form part of formal banking channel. They also offer insurance products to cover losses and damages on account of natural calamities. Its customer centric approach is evident from its customer retention ratio that was 67.97%, 77.58%, 79.50% and 87.36 % in FY18, FY19 and FY20 and in the 9MFY21, respectively for its inclusive finance portfolio.

  • Diversified asset portfolio with a focus on retail operations
    Over the years, the Bank has been able to diversify its product portfolio to ensure that the proportion of net unsecured portfolio has reduced from 94.81% of net advances in FY18 to 77.49% in FY20 and further to 74.59% in the 9MFY21. SSFB commenced operations as a microfinance institution in 2009, and following conversion to a SFB, they have been able to diversify into other products which broadly include commercial vehicle loans, affordable home loans, micro business loans, secured and unsecured business loans to MSME/SME and corporates and financial intermediary group loans.

    Inclusive finance loans constitute a significant portion of Gross Loan Portfolio and as of FY18, FY19 and FY20 and in the 9MFY21, these loans represented 89.89%, 81.44%, 75.85% and 70.35%, respectively, of Gross Loan Portfolio.

  • Track record of strong financial performance and cost efficient operations
    SSFB has been growing since its conversion as an SFB and believes that it is currently in a robust financial position that, will enable them to expand their business quickly. Its Gross Loan Portfolio has grown at a CAGR of 46.98% over FY18-20 to ₹3,711 cr in FY20 and was at ₹3,903 cr as of December 31, 2020. SSFB believes that its core strength is to perform operations in a cost efficient and effective manner without compromising on the quality of service which is evident its cost-to-income ratio being lowest among SFBs in India (Crisil Report). The cost-to-income ratio has reduced from 64.44% in FY18 to 47.05% in FY20 and was 55.39% during 9MFY21. SSFB believes that its cost efficient operations are attributable to automation and digitization of various processes including loan sourcing in inclusive finance business.

  • Experienced leadership team, professional management and strong corporate governance
    The bank is led by Mr. Baskar Babu Ramachandran, founder, Managing Director and Chief Executive Officer who has several years of experience in the financial services sector and has held leadership positions in companies like HDFC Bank Limited, GE Capital Transportation Financial Services Limited amongst others. SSFB believes that wide experience and expertise of its senior management team has been instrumental in scaling up its business operations and diverse and experienced Board ensures transparency and accountability in its operations.



Key Risk
  • The continuing impacts of COVID-19 are highly unpredictable and could be significant, and may have an adverse effect on its business, operations and future financial performance.
  • Advances to inclusive finance (JLG) customers during FY20 and 9MFY21 represented 75.85% and 70.35%, respectively, of its total Gross Loan Portfolio. Any adverse developments in the microfinance sector including any regulatory changes could adversely impact its business.
  • The promoter, Mr. Promoters, R. Baskar Babu, has encumbered 8,150,000 Equity Shares of his 11,290,000 Equity Shares in favour of Avendus Finance Private Limited and Kiran Vyapar Limited and 3,140,000 Equity Shares favour of Placid Limited in relation to borrowing arrangements entered into by him in his personal capacity. Any exercise of such encumbrance by such Systemically Important NBFCs could dilute the shareholding of such Promoter and consequently dilute the aggregate shareholding of the Promoters, which may materially and adversely affect its business and financial condition.
  • Advances towards customers in Maharashtra, Tamil Nadu and Odisha represented 34.76%, 27.43% and 15.11%, respectively, of its Gross Advances as of December 31, 2020. Regional slowdown in the economic activity in Tamil Nadu, Maharashtra or Odisha, or any other developments including political unrest, disruption or sustained economic downturn or natural calamities in the regions can impact the ability of borrowers to repay loans.
 

How to apply IPO on 5paisa app?

  • Login to your 5paisa Mobile Trading App and select the Suryoday Small Finance bank IPO in the current IPO section
  • Enter the number of lots and price at which you wish to apply for
  • Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange
  • You will receive a notification to block funds in your UPI app
  • Approve the block request
    

Suryoday Small Finance Bank Ltd IPO Frequently Asked Questions

Suryoday Small Finance Bank is a leading small finance bank in India having 554 banking outlets and has a customer base of 14.4 lakh is coming up with its Initial Public Offering on Wednesday, March 17 with the public issue comprising a fresh issue size of up to ₹582.34 crore.

You can apply for the Suryoday Small Finance Bank IPO using any supported UPI apps. To Apply on 5paisa App follow the procedure mentioned above. For further details Click Here.

Suryoday Small Finance Bank IPO will open on March 17, 2021.

The Issue Size of Suryoday Small Finance Bank IPO is 19,093,070 Equity Shares of face value ₹10 aggregating ₹582.34 Cr.

Suryoday Small Finance Bank IPO Lot size is 49 equity shares, that means you can apply for one lot consisting 49 equity shares.

Shares of Suryoday Small Finance Bank will be getting allotted on 24th March, 2021.

Suryoday Small Finance Bank Shares will be getting listed on 30th March, 2021.

Here is the minimum investment calculation of Suryoday Small Finance Bank IPO
Lot size – 49 * Issue Price ₹305 = ₹14,945
Hence the minimum investment amount required to invest in Suryoday Small Finance Bank IPO is ₹14,945. As per the maximum limit that is allowed by SEBI you can apply for 13 lots

No, one bank account one IPO application is allowed.

Cut off Price for Suryoday Small Finance Bank IPO is ₹14,945.

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Contact Details of Suryoday Small Finance Bank Ltd IPO

Company Contact Information

Suryoday Small Finance Bank Ltd IPO
1101 Sharda Terrace Plot 65,
Sector 11 CBD Belapur,
Navi Mumbai, Maharashtra 400614.

Phone:
Email: priyav@suryodaymf.com
Website: https://www.suryodaybank.com/

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