Utkarsh Small Finance Bank IPO to open on July 12

Utkarsh Small Finance Bank is a financial institution that operates as a small finance bank in India. It offers a wide range of banking products and services, including savings accounts, current accounts, fixed deposits, recurring deposits, and loans for individuals and businesses. The bank focuses on serving the underbanked and unbanked sections of society, particularly in rural and semi-urban areas. Utkarsh Small Finance Bank aims to provide inclusive banking solutions and promote financial inclusion in the country.
I apologize for the incomplete sentence. Based on the information provided, it appears that Utkarsh, incorporated in 2016 and commencing operations in 2017, offers a range of deposit products including savings accounts, salary accounts, current accounts, recurring deposits, fixed deposits, and locker facilities. Additionally, as of fiscal 2023, it had the second highest provision coverage ratio among Small Finance Banks (SFBs). Utkarsh\’s operations primarily target rural and semi-urban areas, and by March 2023, it had 3.59 million customers mainly located in these areas.

Furthermore, unlike Non-Banking Financial Companies (NBFCs) that typically focus on specific loan products such as vehicle loans, microfinance loans, or housing finance, SFBs like Utkarsh have the ability to expand both vertically and horizontally. This means they can offer multiple loan products and deposit products. It is expected that SFBs will experience a Compound Annual Growth Rate (CAGR) of approximately 22% in their loan portfolios between fiscal 2023 and fiscal 2025.
The size of the Utkarsh Small Finance Bank Initial Public Offering (IPO) consists of fresh equity issues of up to Rs 500 crore. It does not include an offer for sale (OFS) segment.
The price band for the Utkarsh Small Finance Bank IPO has been set at Rs 23-25 per share. Investors participating in the public offer can bid for a minimum of 600 shares and in multiples thereafter.
The structure of the Utkarsh Small Finance Bank IPO is as follows: approximately 75% of the offer is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NII), and the remaining 10% is allocated for retail investors.

Regarding the financial performance of Utkarsh Small Finance Bank, for the fiscal year ending in March 2023, the company reported a total income of Rs 2,804 crore. The net profit for the same period was recorded at Rs 404 crore.
The primary objective of the Utkarsh Small Finance Bank IPO is to utilize the proceeds from the fresh issue to strengthen the bank\’s Tier 1 capital base, enabling it to meet future capital requirements.

As for the current Grey Market Premium (GMP) of Utkarsh Small Finance Bank, market analysts indicate that it is approximately Rs 14 per share in the unlisted market.
Utkarsh Small Finance Bank achieved the third fastest gross loan portfolio growth among small finance banks between fiscal 2019 and fiscal 2023.

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