Jana Small Finance Bank Approaches SEBI For ₹575 Crore IPO

Jana Small Finance Bank, a private lender based in Bengaluru, has resubmitted its application for an initial public offering (IPO) after having to delay its previous plan due to the pandemic.

The IPO includes a fresh issue of shares worth up to Rs 575 crore and an offer for sale of up to 4.1 million shares.

The bank started its operations as a small finance bank in March 2018, and as per RBI regulations, small finance banks are required to go public within five years of starting operations.

Microfinance loans make up a significant portion of the bank’s business, accounting for around 44.6% of its loan portfolio.

Other loans include advances to micro, small, and medium enterprises, loans to non-banking finance companies, and gold loans. The bank held deposits worth Rs 16,330 crore as of March 31.

As for the bank’s financial performance, its total gross non-performing assets (NPA) as of March 31 stood at Rs 709 crore, down from Rs 757 crore the previous year, with the NPA ratio at 3.9%, which is the highest among its peers. Jana’s credit cost for 2022-23 was 4.8%, higher than the previous two years.

The company filed its Draft Red Herring Prospectus with the market regulator and plans to raise funds through equity shares.

The net proceeds from the IPO will be used to enhance the bank’s capital base for future growth, expansion, and compliance with regulatory requirements.

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According to a Fitch Report, Jana Small Finance Bank is the fourth-largest Small Finance Bank in terms of Assets Under Management (AUM) and deposit size as of March 31, 2023.

The bank operates through 754 banking outlets in 22 states and two union territories, including rural centers, and has served nearly 12 million customers since 2008, with around 4.57 million active customers as of March 31, 2023.