Jana Small Finance Bank Limited is launching its IPO. The IPO opens for subscription on February 07, 2024, and will close on 9th February 2024.
What does Jana Small Finance Bank do?
Established in July 2006 as ‘Janalakshmi Financial Services Private Limited,’ Jana Small Finance Bank Limited has undergone many transformations. It began as a non-banking financial institution and later turned into a scheduled commercial bank, beginning operations as a Small Finance Bank on March 28, 2018.
Jana SFB’s core focus lies in providing a range of financial solutions, including secured products like MSME loans, affordable housing loans, and unsecured offerings like individual and micro business loans. Additionally, it offers loans against fixed deposits, two-wheeler loans, gold loans, and more.
The bank is strategically expanding its reach by establishing 771 banking branches in 22 states and two union territories. Of particular significance is its commitment to reaching unbanked rural areas, with 278 outlets dedicated to serving these regions. Since its inception in 2008, the bank has served nearly 1.2 crore customers, with 48.7 lakh active customers as of September 30, 2023. According to Fitch, it is currently the fourth-largest Small Finance Bank in terms of AUM and deposit size.
It also has a digital presence, providing mobile and internet banking services to both retail and corporate customers. Between March 31, 2021, and March 31, 2023, the bank’s gross secured advances increased from ₹50,760.00 million to ₹99,047.54 million, resulting in a CAGR of 39.69%.
What is the issue size of Jana Small Finance Bank Limited IPO?
The public offering is a book-built issue worth Rs 570.00 crore. This issue consists of a fresh issue of 1.12 crore shares valued at Rs 462.00 crores and an offer for sale of 0.26 crore shares valued at Rs 108.00 crore.
Financials of Jana Small Finance Bank Limited IPO
| Financial Year | Total Assets (₹ crores) | Total Revenue (₹ crores) | Profit After Tax (₹ crores) | Net Interest Income (₹ crores) | EPS |
|---|---|---|---|---|---|
| March 31, 2021 | 19,078.66 | 2,720.74 | 72.26 | 1,263.14 | 13.46 |
| March 31, 2022 | 20,188.71 | 3,062.37 | 17.41 | 1,389.78 | 3.21 |
| March 31, 2023 | 25,643.69 | 3,699.88 | 255.97 | 1,660.02 | 42.64 |
| September 30, | |||||
| 2022 | 22,682.82 | 1,689.61 | 55.63 | 751.86 | 9.76 |
| September 30, | |||||
| 2023 | 28,105.87 | 2,215.57 | 213.21 | 987.63 | 29.45 |
Risk factors to consider:
Regulatory Inspections: The company is under constant scrutiny by regulatory authorities like RBI, PFRDA, IRDA, and National Pension System Trust. Any non-compliance with their observations or regulations could have severe consequences, potentially impacting the company’s business operations, financial health, and cash flow.
Prudential Norms and Regulatory Action: Strict regulatory requirements and non-compliance could lead to regulatory actions, impacting the company’s business.
Listed Non-Convertible Debentures: The company’s non-convertible debentures are listed on the BSE, subjecting it to strict rules and regulations. Any failure to comply with these rules may lead to penal actions, which could have a detrimental impact on the company’s business, financial condition, and cash flow.
Interest Rate Risk: The company is exposed to interest rate risk, which could affect its Net Interest Margin, Net Interest Income, and overall financial condition if interest rates increase or fixed-income securities decrease in value.
Operational Risks: Operational risks such as employee negligence, theft, burglary, fraud, and cyber threats could harm the company’s reputation, business, financial condition, results of operations, and cash flows.
Regional Risk: Economic downturns, political unrest, natural disasters, or epidemics in states like Tamil Nadu, Karnataka, Maharashtra, and West Bengal, where the company has a significant presence, could adversely affect its business.
Unsecured Loans: The company’s unsecured loans, particularly Microfinance Loans, carry a higher credit risk due to the limited financial resilience of customers availing these loans. These loans lack collateral, making it challenging to recover them promptly or at all. Any difficulty in recovering these advances could significantly impact the company’s financial condition and overall stability.
Credit Risk Assessment: Many customers lack credit history, making it difficult to assess credit risks. This may increase non-performing assets (NPAs), impacting the company’s financial condition.
IT System Vulnerabilities: Weaknesses, disruptions, or failures in IT systems, along with cyber threats, could harm the company’s business, reputation, and financial condition.
Brand Reputation: Negative publicity or associations with third parties using the company’s brand could harm its reputation and business.
Schedule/Timeline of Jana Small Finance Bank Limited IPO
| Issue Period | February 07, 2024, to February 9th, 2024 |
|---|---|
| Price band | ₹ 393 - 414 |
| Minimum Bid quantity | 36 & Multiples thereof |
| Deadline for accepting UPI mandate | 5:00 PM on the issue Closing Date. |
| Finalization of Allotment | February 12, 2024 - Monday |
| Initiation of Refunds | February 13, 2024 - Tuesday |
| Credit of Shares | February 13, 2024 - Tuesday |
| Date of Listing | February 14, 2024 - Wednesday |
| Mandate end date | February 24, 2024 - Saturday |
| Anchor Investors Lock-In End Date | |
| (50% of the Investment) | March 13, 2024 - Wednesday |
| Anchor Investors Lock-In End Date | |
| (Remaining of the Investment) | May 13, 2024 - Monday |
Note: Given that the above schedule is tentative, it should be noted that the anchor lock-in period ends 30 days after the actual allotment date for 50% of the shares, and 90 days after for the remaining portion.
How to apply for the Jana Small Finance Bank Limited IPO?
You can apply for Jana Small Finance Bank Limited IPO using any supported UPI app by following two steps:
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Enter your bid on Kite
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Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.
How to check the allotment status of the Jana Small Finance Bank Limited IPO?
You can check the allotment status for the Jana Small Finance Bank Limited IPO on the website of the Registrar and Transfer Agent. Alternatively, you can also check the allotment status on the NSE website.