Ujjivan Small Finance Bank made a strong market debut on Thursday Dec 12,2019 with the stock listing at a premium of 56.76 per cent.
Ujjivan Small Finance shares began trading at a share price of Rs 58 as against the higher end of its issue price of Rs 37.
Ujjivan Small Finance Bank shares climbed to as high as Rs 62.80 in morning deals, marking a premium of 69.73 per cent compared with the issue price.
Ujjivan Small Finance Bank - an arm of Bengaluru-based financial company Ujjivan Financial Services - saw huge investor interest in a blockbuster which concluded last week.
The Ujjivan Small Finance Bank IPO came at a time when the company was racing to comply with the Reserve Bank of India's requirement for small finance banks to list its shares within three years of starting operations. The deadline set for Ujjivan Small Finance Bank was January 31,2020
Ujjivan Small Finance Bank plans to utilize the IPO proceeds to boost its capital. Its Tier-1 capital ratio - a key measure of a bank's financial strength - was at 18.16 per cent at the end of September, according to its prospectus
Note
Au Financiers India Ltd – A Jaipur based NBFC which currently provides financing for cars and heavy vehicles in the state of Rajasthan
Disha Microfin Pvt Ltd – A MFI headquartered in Ahmedabad and having microfinance operations predominantly in the West of India
Equitas Holdings Pvt Ltd – A diversified microfinance company with headquarters in Chennai and having operations in microfinance and micro-housing loans
ESAF Microfinance – The Kerala focused MFI has it’s headquarters in Chennai and has done pioneering work in the state of Tamil Nadu
Janalakshmi Financial Services Pvt Ltd, Headquartered in Bangalore, Janalakshmi is one of India’s largest microfinance companies
RGVN North East Microfinance Ltd is a MFI based in North East India with it’s headquarters in Guwahati, Assam
Suryoday Microfinance Pvt Ltd is a MFI based in Mumbai with operations in Maharashtra, Gujarat and Orissa.
Ujjivan Financial Services Pvt Ltd – A Bangalore based MFI and one of the first microfinance companies to scale up operations in urban India
Utkarsh Microfinance Pvt Ltd with headquarters in Varanasi and operations spread across the states of Uttar Pradesh
History of Small Finance Banks in India
Small Finance Banks are a new category of Banks announced by the RBI in July 2014, when the draft guidelines for small finance banks was made public.
By February 2015, RBI had received applications from 72 applicants and an external advisory committee headed by Usha Thorat was constituted to evaluate the applicants.
The 10 companies that received licenses today come from this group of applicants.
Benefits of Small Finance Bank Licenses
Small Finance Banks licenses are more restrictive than a regular bank license, such as one given to State Bank of India (SBI) or ICICI Bank.
While small finance banks can undertake fundamental banking activities such as deposit taking and lending, they are not allowed to set up subsidiaries.
Also the loan ticket size is much smaller in Small Finance Banks compared to regular banks.
RBI has mandated that the activities of promoters of small finance banks should not be mixed with banking operations.
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