Suryoday Small Finance Bank IPO (Initial Public Offer) has become open for subscription today and the upcoming IPO will remain open for bidding till 19th March 2021. Suryoday Small Finance Bank IPO allotment date has been fixed on 24th March 2021 means one can do the Suryoday Small Finance Bank IPO allotment status check on 24th March 2021. Suryoday SFB IPO price band has been fixed at Rs 303 to Rs 305 and tentative Suryoday Small Finance Bank IPO listing date is 30th  March 2021.

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Suryoday Small Finance Bank IPO lot size is of 49 Suryoday Small Finance Bank shares means one can bid for the Suryoday Small Finance Bank IPO with a minimum amount of Rs 14,945 and single bidder can bid for maximum 13 lots means the maximum investment in Suryoday Small Finance Bank IPO is capped at Rs 1,94,285.

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However, before bidding for the upcoming IPO, one must know the below mentioned fundamentals in regard to the small finance bank:

1] Suryoday Small Finance Bank commenced its operations as an SFB in 2017. It has a decade-long track record in serving customers in the unbanked and underbanked segments in India and promoting financial inclusion, having commenced its microfinance operations in 2009. It has since expanded across 13 states and union territories as of December 2020, through 554 banking outlets.

2] Suryoday is among 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 Fiscal 2020. It also has the highest capital adequacy ratio of 41.2% amongst small finance banks, as of December 2020.

3] India has historically been an underbanked nation, although the financial inclusion has improved greatly in the last three years. But while the number of accounts have increased, their effective use for transactions and the availability of credit to the unserved and underserved remain key growth drivers for inclusive financial institutions like SFBs.

4] Further, considering the differentiated nature and focus of SFBs, and the role they can play in supply of credit to unbanked regions, there is a sizable market opportunity in providing financial services to the low-income segment. Additionally, these borrowers have low credit penetration and migrate less between service providers, giving SFBs a loyal customer base.

5] Suryoday’s gross loan portfolio has grown at a CAGR of nearly 47% from FY18 to FY20. On the other side, its deposit franchise has also demonstrated growth of ~95% from FY18 to FY20, mainly driven by retail deposits. As of December 2020, retail deposits comprised 72.4% of its total deposits.

6] The SFB leverages the use of technology across all aspects of operations. In particular, it uses digital technology for customer acquisition and customer lifecycle management. Its employees use tablets to service customers in the unbanked and underbanked segments which has led to greater customer convenience and improved operational efficiency.

7] Suryoday believes in having a customer-centric approach with strong focus on financial inclusion – its inclusive finance portfolio (comprising loans to JLGs) accounted for ~70% of its gross loan portfolio as of December 2020. Moreover, its priority sector loans (PSL) as a percentage of average ANBC was 114% as of December 2020.

8] Suryoday has a track record of strong financial growth in terms of net interest income, revenues and profitability. For FY20, it had industry leading NIMs of 11.9%, RoAA of 2.5% and RoAE of 11.3%. Further, due to its lean and efficient operations, its cost to income ratio was less than 50%, which is the lowest amongst small finance banks.

9] The Bank has been laying strong emphasis on building up a strong retail franchise with a high degree of granularity. The proportion of retail deposits has increased from 41.2% in FY18 to 72.4% as of December 2020. Along the same lines, the CASA book has recorded a CAGR of 84% from March 2018 to December 2020.

10] Finally, the collection efficiency of the Bank has bounced back sharply post Covid. In microfinance Suryoday had collection efficiency of nearly 89%, whereas overall collection efficiency was 111% in December 2020 (which denotes certain customers paying pending arrears as well).

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