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Capital Small Finance Bank Ltd IPO
Status:
Overview
IPO date
07 Feb 2024 to 09 Feb 2024
Face value
₹ 10 per share
Price
₹ 445 to ₹468 per share
Issue Size
11,176,713 shares
(aggregating up to ₹ 523.07 Cr)
(aggregating up to ₹ 523.07 Cr)
Allotment Date
12 Feb 2024
Listing at
NSE
Issue type
Book Building
Sector
Objectives of Capital Small Finance Bank Ltd IPO
Initial public offer of 11,176,713^ equity shares of face value of Rs. 10 each ("Equity Shares") of Capital Small Finance Bank Limited ("Bank" or "Issuer") for cash at a price of Rs. 468 per equity share (including a share premium of Rs. 458 per equity share) ("Offer Price"), aggregating to
Rs. 523.07^ crores (the "Offer"), comprising a fresh issue of 9,615,384^ equity shares aggregating to Rs. 450.00^ crores (the "Fresh Issue") and an offer for sale of 1,561,329^ equity shares aggregating to Rs. 73.07 crores (the "Offer for Sale"), comprising 836,728^ equity shares aggregating to
Rs. 39.16^ crores by Oman India Joint Investment Fund ii ("IJIF" II", 151,153^ equity shares aggregating to Rs. 7.07^ crores by Amicus Capital Private equity i llp (""ACPE"), 17,544^ equity shares aggregating to
Rs. 0.82^ crores by Amicus Capital Partners India fund i ("ACPIF", together with acpe, "Amicus", and together with ACPE, and OIJIF II, the "Investor selling shareholders"), and 555,904^ equity shares aggregating to
Rs. 26.02^ crores by certain persons listed in this prospectus (the "Other Selling Shareholders", as defined below) (the investor selling shareholders and the other selling shareholders, collectively, the "Selling Shareholders", and such equity shares offered by the selling shareholders, the "Offered Shares").
The face value of the equity shares is Rs. 10 each and the offer price is 46.80 times the face value of the equity shares.
^Subject to finalization of basis of allotment.
Capital Small Finance Bank Ltd IPO Strategy
- Continue to grow its loan book organically with focus on secured lending.
- Strengthen its liability franchise.
- Leverage technology and data analytics for scalability and profitable growth.
- Customer Centric Initiatives.
- Initiatives Driving Operational Efficiencies.
- Focus on strengthening its operational and profitability metrics.
- Improve credit to deposit ratio.
- Focus on optimising costs.
- Focus on improving share of fee income and leverage cross-selling opportunities.
About Capital Small Finance Bank Ltd
Capital Small Finance Bank Limited was incorporated as Capital Local Area Bank Limited' on May 31, 1999 at Phagwara, Dist. Kapurthala, Punjab, as a Public Limited Company. The name of Bank was changed to Capital Small Finance Bank Limited' pursuant to Reserve Bank of India approval dated March 4, 2016, and a fresh Certificate of Incorporation was granted by RoC in Punjab and Chandigarh on April 15, 2016.
Capital Small Finance Bank is regulated by RBI and commenced operations as India's first small finance bank in 2016 pursuant to RBI's approval dated March 4, 2016. The Bank offer banking products on the asset and liability side, in all the states it operate in, i.e., Punjab, Haryana, Delhi, Rajasthan, Himachal Pradesh and Union Territory of Chandigarh, with the asset products primarily including agriculture loans, MSME and trading loans and mortgages. The Bank primarily works in the middle-income customer segments. The Bank is engaged in providing a wide range of banking and financial services including retail & commercial banking and treasury operations.
The Bank commenced its business pursuant to a Certificate of Commencement of Business issued by the RoC, Punjab, Himachal Pradesh and Chandigarh dated August 12, 1999. The Bank operate in a competitive environment and face competition from other Small Finance Banks, Scheduled Commercial Banks and NBFCs as well as local moneylenders in rural areas and unorganized, small participants in the market across all product segments. The loan portfolio comprises agricultural, MSME and trading, mortgage lending, retail loans and loans to large corporates. As a small finance bank, Bank focus primarily on agricultural, MSME and trading, retail and mortgage loans which constitute the majority of loans.
In 2000, the Bank started operating transactions in Jalandhar, Kapurthala and Hoshiarpur as a local area bank. In 2013, Bank expanded operations in two additional districts of Ludhiana and Amritsar in Punjab, which consequently expanded the outreach of the Bank to five districts.
Headquartered in Jalandhar, Punjab. Capital Small Finance Bank began operations as India's first small finance bank (SFB) in April, 2016 after conversion from Capital Local Area Bank, in terms of asset quality, cost of funds, retail deposits and CASA deposits. Prior to 2016, it operated as a local area bank and were one of the two non-microfinance institutions who were granted the SFB license by RBI. Due to background as a local area bank, the Bank already existed in diversified segments which accordingly, resulted in having lower systemic risks in comparison to the overall high MFI base.
As of March 31, 2021, 74% of total branches were located in rural and semi-urban areas with 27% of the branches were in unbanked rural centres.
As on March 31, 2023, the Bank had 170 branches, 175 ATMs across India.
The Net Profit of the Bank crossed Rs 93.59 Crore registering a growth of 50%. Total business of the Bank crossed Rs 12,000 Crore in 2023.
The Company made an Initial Public Offer aggregating 11,176,713 no. of Equity Shares of Rs 10 each by raising funds from public aggregating to Rs 523 Crore, comprising a Fresh Issue of 9,615,384 Equity Shares aggregating to Rs 450 Crore and 1,561,329 Equity Shares aggregating to Rs 73 Crore through Offer for Sale in February, 2024.
As on March 31, 2024, the Bank had 177 branches, 179 ATMs across India. The Bank has crossed a net profit of Rs 100 Crore in 2024. Total business of the Bank has crossed Rs 120,00 Crore.
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T&C*
Strengths vs Risks of Capital Small Finance Bank Ltd
Know the pros & cons
Strengths
Retail Focused Liability Franchise with High Share of CASA.- Secured and diversified advances portfolio.
- Streamlined credit assessment processes and risk management practiceo.
- Customer centric approach and understanding of target customers.
- Consistent track record of growth with constantly improving operational and profitability metrics.
- Professional and experienced leadership team.
- From Fiscal 2021 to 2023, its operating profit and profit after tax grew at a CAGR of 44.23% and 51.49%, respectively.
Risks
- Its business is concentrated in North India, with approximately 87% of its total branches located in the state of Punjab. Any adverse change in the economy of North India could have an adverse effect on its financial condition, results of operations and cash flows.
- The Bank is subject to strict regulatory requirements and prudential norms. If its unable to comply with such laws, regulations and norms it may have an adverse effect on its business, financial condition, results of operations and cash flows.
- The bank is subject to certain prudential norms. If its unable to comply with these norms it may have an adverse effect on its business, financial condition, results of operations and cash flows.
- As at three months ended June 30, 2023 and June 30, 2022 and Fiscals ended March 31, 2023, 2022 and 2021, our gross NPAs to gross advances were 2.81%, 2.93%, 2.77%, 2.50% and 2.08% and its provision coverage ratio was 51.90%, 42.50%, 51.48% 46.02% and 46.14%, respectively. If the bank is unable to control the level of NPAs in its portfolio effectively or if its unable to improve or maintain the bank provisioning coverage as a percentage of gross NPAs, its business, financial condition, results of operations and cash flows could be adversely affected.
- Its may be impacted by volatility in interest rates, which could cause its Net Interest Margin to decline and adversely affect its results of operations and cash flows.
- The bank id involved in certain legal proceedings, any adverse developments related to which could adversely affect its reputation, business and cash flows.
- Its Cost to Income Ratio was 58.58%, 64.38%, 59.97%, 63.42% and 70.76% for the three months ended June 30, 2023 and June 30, 2022 and the Fiscals ended March 31, 2023, 2022 and 2021 respectively. An increase in the Cost to Income Ratio will adversely affect its financial condition, results of operations and cash flows.
- Its business is currently significantly dependent on banking operations in rural and semi-urban areas and any adverse developments in the banking and finance sector in these areas could adversely affect its business, financial condition, results of operations and cash flows.
- As of August 31, 2023, the bank had total indebtedness of Rs. 6,205.10 million. If its unable to service its debt obligations in a timely manner or to comply with various financial and other covenants and other terms and conditions of its financing agreements, it may adversely affect the company business, credit rating, reputation, prospects, results of operations, cash flows and financial condition.
- If its unable to secure funding on acceptable terms and at competitive rates when needed, it could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- Any downgrade in its credit ratings could increase the company borrowing costs, affect its ability to obtain financing, and adversely affect the bank business, results of operations and financial condition.
- The Indian finance industry is intensely competitive and if its unable to compete effectively it would adversely affect the company business, financial condition, results of operations and cash flows.
- If its fail to effectively manage the bank growth or implement its growth strategies, its business may be adversely affected.
- If its fail to maintain the bank CASA Ratio, its may have a higher cost of funds than its primary competitors, which could adversely affect the bank's ability to grow and compete for market share for loans unless its decrease the bank Net Interest Margin.
- Its may incur losses due to a decline in the value of collateral obtained as security for the loans disbursed by it and its inability to seize and recover the full value of collateral may adversely affect its business, results of operations, financial condition and cash flows.
- The bank relies extensively on and upgrade its information technology systems and any disruptions in such systems, or breach of data, could adversely affect its operations and reputation. Further, the bank's success depends on its ability to respond to new technological advances.
- Its utilize the services of certain third parties for the bank operations. Any deficiency or interruption in their services could adversely affect its business and reputation.
- Its may face cyber threats attempting to exploit the bank network to disrupt services to customers and/ or theft of sensitive internal data or customer information, which may cause damage to its reputation and adversely affect its financial condition, results of operations and cash flows.
- The Equity Shares have never been publicly traded, and, after the Offer, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the Offer Price, market capitalization to total revenue multiple, price to total income ratio and price to earnings ratio based on the Offer Price of its Bank, may not be indicative of the market price of the Equity Shares on listing.
- Its Statutory Auditors have issued certain emphasis of matters on its financials statements in the past.
- Its may be unable to maintain or renew the bank statutory and regulatory permits, licences and approvals required to operate its business.
- Its may face asset liability mismatches, which could affect its liquidity and consequently may adversely affect the bank financial condition, results of operations and cash flows.
- Deterioration in the performance of any industry sector in which the bank have significant exposure may adversely affect its financial condition, results of operations and cash flows.
- If its risk management policies are ineffective, it could adversely affect its business, financial condition, results of operations and cash flows.
- Its ability to pay dividends in the future will depends on its financial condition, results of operations, cash flows, capital requirements, capital expenditures as well as compliance with applicable RBI regulations.
- The bank has certain contingent liabilities, which if they materialise, may adversely affect its financial condition, cash flows and results of operations.
- The bank could be subject to volatility in income from its treasury operations, which could have an adverse effect on its results of operations and cash flows.
- The bank had in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.
- Its non-convertible debentures are listed on BSE and the bank is subject to rules and regulations with respect to such listed non-convertible debentures. If its fail to comply with such rules and regulations, the bank may be subject to certain penal actions, which may have an adverse effect on its business, results of operations, financial condition and cash flows.
- The bank is exposed to operational risks, including employee negligence, petty theft, burglary and embezzlement and fraud by employees, agents, customers or third parties, which could harm its reputation, business, financial condition, results of operations and cash flows.
- The bank is subject to inspections by various regulatory authorities, including by the RBI and by IRDAI. Inspection by the RBI is a regular exercise for all banks and financial institutions. Non-compliance with the observations of such regulators could adversely affect its business, financial condition, results of operations and cash flows.
- Banking companies in India, including it, may be required to report financial statements as per Ind AS in the future. Differences exist between Ind AS and Indian GAAP. In the future, if its required to prepare the bank financial statements in accordance with Ind AS, there is a possibility that its financial condition, results of operations and cash flows could be poorly represented, owing to the difference in the accounting techniques between Ind AS and Indian GAAP.
- Certain of its corporate records and filings are not traceable. The bank cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and its will not be subject to any penalty imposed by the competent regulatory authority in this regard.
- There has been a delay in relation to reporting requirements in respect of issuance of Equity Shares by its Bank under the applicable laws.
- Its may breach third-party intellectual property rights.
- If the bank fail to adapt to technological advancements in the financial services sector it could affect the performance and features of its products and services and reduce the banj attractiveness to customers.
- Its lease or licence all of the bank's business premises and any failure to renew such leases or licences or their renewal on terms unfavourable to it may adversely affect its business, financial condition and results of operations and cash flows.
- Certain of its Directors are on the board of directors of companies engaged in a line of business similar to that of its. Any conflict of interest that may occur as a result could adversely affect its business, financial condition, results of operations and cash flows.
- RBI may remove any employee, managerial personnel or may supersede its Bank's Board of Directors in certain circumstances, which may materially affect its Bank's business, results of operations, and financial conditions.
- There may be conflict of interest between the BRLMs or their respective associates/ affiliates and the Bank.
- Any non-compliance with mandatory AML, KYC and CFT laws and regulations could expose it to liability and harm its business and reputation.
- The bank depends on its brand recognition. Any negative publicity or the bank's inability to further enhance awareness about its brand could damage its reputation and, in turn, affect its business, financial condition, results of operation and cash flows.
- While certain of its trademarks used by it for its business are registered, any inability to protect its intellectual property or know how from third party infringement may adversely affect its business and prospects.
- The bank has experienced negative cash flows in prior years.
- Its may face employee or labour disruptions that would interfere with its operations and have an adverse effect on the bank's business, financial condition, results of operations and cash flows.
- The bank depends on the accuracy and completeness of information about customers and counterparties and any misrepresentation, errors or incompleteness of such information could cause its business to suffer.
- The Bank has settled a matter with SEBI in the past in connection with allotment of Equity Shares to more than 49 investors.
- The bank is dependent on its key managerial personnel and members of senior management and other key personnel, and the loss of, or its inability to attract or retain, such persons could adversely affect its business, financial condition, results of operations and cash flows.
- If its were to incur a serious uninsured loss or a loss that significantly exceeds the limits of its insurance policies, it could have an adverse effect on its financial condition, results of operations and cash flows.
- Its Promoters, certain of the bank's Directors, Key Managerial Personnel and Senior Management have interests in it other than reimbursement of expenses incurred and normal remuneration or benefits.
- One of its Directors has not been able to trace certain records of his educational qualifications and the bank has relied on the certificate and affidavit furnished by him for such details of his profile, included in this Draft Red Herring Prospectus.
- Increasing regulatory focus on personal information protection could impact its business and expose it to increased liability.
- The bank has in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other selected statistical information related to its operations and financial condition. These non-GAAP measures and statistical information may vary from any standard methodology that is applicable across the financial services industry, and therefore may not be comparable with financial or statistical information of similar nomenclature computed and presented by other financial services companies.
- The bankruptcy code in India and other related laws may affect our rights to recover loans from our customers.
- If inflation were to rise in India, we might not be able to increase the prices of our services at a proportional rate in order to pass costs on to our customers and our profits might decline.
- Changing laws, rules and regulations and legal uncertainties, including adverse application of tax laws and regulations, across the multiple states we operate in, may have a material adverse effect on our business, financial condition, results of operations and cash flows.
Capital Small Finance Bank Ltd Peer Comparison
Understand the company’s industry standing
Capital Small Finance Bank Ltd
IDFC First Bank Ltd
AU Small Finance Bank Ltd
Face Value
10
10
10
Standalone / Consolidated
Standalone
Consolidated
Standalone
Total Income Rs. Cr.
725.482
27195.091
9239.873
EPS-Basis
27.35
3.91
21.86
EPS-Diluted
27.21
3.84
21.74
NAV Per Share
178.27
38.86
164.64
P/E-Basic EPS
17.11
21.76
33.4
P/E-Diluted EPS
---
---
---
RONW(%)
15.32
9.44
13.01
Latest NAV Period
---
---
---
Latest NAV
---
---
---
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The IPO opens on 07 Feb 2024 & closes on 09 Feb 2024.
Capital Small Finance Bank Limited was incorporated as Capital Local Area Bank Limited' on May 31, 1999 at Phagwara, Dist. Kapurthala, Punjab, as a Public Limited Company. The name of Bank was changed to Capital Small Finance Bank Limited' pursuant to Reserve Bank of India approval dated March 4, 2016, and a fresh Certificate of Incorporation was granted by RoC in Punjab and Chandigarh on April 15, 2016.
Capital Small Finance Bank is regulated by RBI and commenced operations as India's first small finance bank in 2016 pursuant to RBI's approval dated March 4, 2016. The Bank offer banking products on the asset and liability side, in all the states it operate in, i.e., Punjab, Haryana, Delhi, Rajasthan, Himachal Pradesh and Union Territory of Chandigarh, with the asset products primarily including agriculture loans, MSME and trading loans and mortgages. The Bank primarily works in the middle-income customer segments. The Bank is engaged in providing a wide range of banking and financial services including retail & commercial banking and treasury operations.
The Bank commenced its business pursuant to a Certificate of Commencement of Business issued by the RoC, Punjab, Himachal Pradesh and Chandigarh dated August 12, 1999. The Bank operate in a competitive environment and face competition from other Small Finance Banks, Scheduled Commercial Banks and NBFCs as well as local moneylenders in rural areas and unorganized, small participants in the market across all product segments. The loan portfolio comprises agricultural, MSME and trading, mortgage lending, retail loans and loans to large corporates. As a small finance bank, Bank focus primarily on agricultural, MSME and trading, retail and mortgage loans which constitute the majority of loans.
In 2000, the Bank started operating transactions in Jalandhar, Kapurthala and Hoshiarpur as a local area bank. In 2013, Bank expanded operations in two additional districts of Ludhiana and Amritsar in Punjab, which consequently expanded the outreach of the Bank to five districts.
Headquartered in Jalandhar, Punjab. Capital Small Finance Bank began operations as India's first small finance bank (SFB) in April, 2016 after conversion from Capital Local Area Bank, in terms of asset quality, cost of funds, retail deposits and CASA deposits. Prior to 2016, it operated as a local area bank and were one of the two non-microfinance institutions who were granted the SFB license by RBI. Due to background as a local area bank, the Bank already existed in diversified segments which accordingly, resulted in having lower systemic risks in comparison to the overall high MFI base.
As of March 31, 2021, 74% of total branches were located in rural and semi-urban areas with 27% of the branches were in unbanked rural centres.
As on March 31, 2023, the Bank had 170 branches, 175 ATMs across India.
The Net Profit of the Bank crossed Rs 93.59 Crore registering a growth of 50%. Total business of the Bank crossed Rs 12,000 Crore in 2023.
The Company made an Initial Public Offer aggregating 11,176,713 no. of Equity Shares of Rs 10 each by raising funds from public aggregating to Rs 523 Crore, comprising a Fresh Issue of 9,615,384 Equity Shares aggregating to Rs 450 Crore and 1,561,329 Equity Shares aggregating to Rs 73 Crore through Offer for Sale in February, 2024.
As on March 31, 2024, the Bank had 177 branches, 179 ATMs across India. The Bank has crossed a net profit of Rs 100 Crore in 2024. Total business of the Bank has crossed Rs 120,00 Crore.
Capital Small Finance Bank Ltd IPO will close on 09 Feb 2024.
- Retail Focused Liability Franchise with High Share of CASA.
- Secured and diversified advances portfolio.
- Streamlined credit assessment processes and risk management practiceo.
- Customer centric approach and understanding of target customers.
- Consistent track record of growth with constantly improving operational and profitability metrics.
- Professional and experienced leadership team.
- From Fiscal 2021 to 2023, its operating profit and profit after tax grew at a CAGR of 44.23% and 51.49%, respectively.
| S.No | Promoters Name | Pre Issue Shares | Pre Issue Percentage | Post Issue Shares | Post Issue Percentage |
|---|---|---|---|---|---|
| 1 | Sarvjit Singh Samra | 4174619 | 11.78 | --- | --- |
| 2 | Amarjit Singh Samra | 1640864 | 4.63 | --- | --- |
| 3 | Navneet Kaur Samra | 884800 | 2.5 | --- | --- |
| 4 | Surinder Kaur Samra | 936486 | 2.64 | --- | --- |
| 5 | Dinesh Gupta | 295920 | 0.84 | --- | --- |
- Its business is concentrated in North India, with approximately 87% of its total branches located in the state of Punjab. Any adverse change in the economy of North India could have an adverse effect on its financial condition, results of operations and cash flows.
- The Bank is subject to strict regulatory requirements and prudential norms. If its unable to comply with such laws, regulations and norms it may have an adverse effect on its business, financial condition, results of operations and cash flows.
- The bank is subject to certain prudential norms. If its unable to comply with these norms it may have an adverse effect on its business, financial condition, results of operations and cash flows.
- As at three months ended June 30, 2023 and June 30, 2022 and Fiscals ended March 31, 2023, 2022 and 2021, our gross NPAs to gross advances were 2.81%, 2.93%, 2.77%, 2.50% and 2.08% and its provision coverage ratio was 51.90%, 42.50%, 51.48% 46.02% and 46.14%, respectively. If the bank is unable to control the level of NPAs in its portfolio effectively or if its unable to improve or maintain the bank provisioning coverage as a percentage of gross NPAs, its business, financial condition, results of operations and cash flows could be adversely affected.
- Its may be impacted by volatility in interest rates, which could cause its Net Interest Margin to decline and adversely affect its results of operations and cash flows.
- The bank id involved in certain legal proceedings, any adverse developments related to which could adversely affect its reputation, business and cash flows.
- Its Cost to Income Ratio was 58.58%, 64.38%, 59.97%, 63.42% and 70.76% for the three months ended June 30, 2023 and June 30, 2022 and the Fiscals ended March 31, 2023, 2022 and 2021 respectively. An increase in the Cost to Income Ratio will adversely affect its financial condition, results of operations and cash flows.
- Its business is currently significantly dependent on banking operations in rural and semi-urban areas and any adverse developments in the banking and finance sector in these areas could adversely affect its business, financial condition, results of operations and cash flows.
- As of August 31, 2023, the bank had total indebtedness of Rs. 6,205.10 million. If its unable to service its debt obligations in a timely manner or to comply with various financial and other covenants and other terms and conditions of its financing agreements, it may adversely affect the company business, credit rating, reputation, prospects, results of operations, cash flows and financial condition.
- If its unable to secure funding on acceptable terms and at competitive rates when needed, it could have a material adverse effect on its business, financial condition, results of operations and cash flows.
- Any downgrade in its credit ratings could increase the company borrowing costs, affect its ability to obtain financing, and adversely affect the bank business, results of operations and financial condition.
- The Indian finance industry is intensely competitive and if its unable to compete effectively it would adversely affect the company business, financial condition, results of operations and cash flows.
- If its fail to effectively manage the bank growth or implement its growth strategies, its business may be adversely affected.
- If its fail to maintain the bank CASA Ratio, its may have a higher cost of funds than its primary competitors, which could adversely affect the bank's ability to grow and compete for market share for loans unless its decrease the bank Net Interest Margin.
- Its may incur losses due to a decline in the value of collateral obtained as security for the loans disbursed by it and its inability to seize and recover the full value of collateral may adversely affect its business, results of operations, financial condition and cash flows.
- The bank relies extensively on and upgrade its information technology systems and any disruptions in such systems, or breach of data, could adversely affect its operations and reputation. Further, the bank's success depends on its ability to respond to new technological advances.
- Its utilize the services of certain third parties for the bank operations. Any deficiency or interruption in their services could adversely affect its business and reputation.
- Its may face cyber threats attempting to exploit the bank network to disrupt services to customers and/ or theft of sensitive internal data or customer information, which may cause damage to its reputation and adversely affect its financial condition, results of operations and cash flows.
- The Equity Shares have never been publicly traded, and, after the Offer, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the Offer Price, market capitalization to total revenue multiple, price to total income ratio and price to earnings ratio based on the Offer Price of its Bank, may not be indicative of the market price of the Equity Shares on listing.
- Its Statutory Auditors have issued certain emphasis of matters on its financials statements in the past.
- Its may be unable to maintain or renew the bank statutory and regulatory permits, licences and approvals required to operate its business.
- Its may face asset liability mismatches, which could affect its liquidity and consequently may adversely affect the bank financial condition, results of operations and cash flows.
- Deterioration in the performance of any industry sector in which the bank have significant exposure may adversely affect its financial condition, results of operations and cash flows.
- If its risk management policies are ineffective, it could adversely affect its business, financial condition, results of operations and cash flows.
- Its ability to pay dividends in the future will depends on its financial condition, results of operations, cash flows, capital requirements, capital expenditures as well as compliance with applicable RBI regulations.
- The bank has certain contingent liabilities, which if they materialise, may adversely affect its financial condition, cash flows and results of operations.
- The bank could be subject to volatility in income from its treasury operations, which could have an adverse effect on its results of operations and cash flows.
- The bank had in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.
- Its non-convertible debentures are listed on BSE and the bank is subject to rules and regulations with respect to such listed non-convertible debentures. If its fail to comply with such rules and regulations, the bank may be subject to certain penal actions, which may have an adverse effect on its business, results of operations, financial condition and cash flows.
- The bank is exposed to operational risks, including employee negligence, petty theft, burglary and embezzlement and fraud by employees, agents, customers or third parties, which could harm its reputation, business, financial condition, results of operations and cash flows.
- The bank is subject to inspections by various regulatory authorities, including by the RBI and by IRDAI. Inspection by the RBI is a regular exercise for all banks and financial institutions. Non-compliance with the observations of such regulators could adversely affect its business, financial condition, results of operations and cash flows.
- Banking companies in India, including it, may be required to report financial statements as per Ind AS in the future. Differences exist between Ind AS and Indian GAAP. In the future, if its required to prepare the bank financial statements in accordance with Ind AS, there is a possibility that its financial condition, results of operations and cash flows could be poorly represented, owing to the difference in the accounting techniques between Ind AS and Indian GAAP.
- Certain of its corporate records and filings are not traceable. The bank cannot assure you that regulatory proceedings or actions will not be initiated against it in the future and its will not be subject to any penalty imposed by the competent regulatory authority in this regard.
- There has been a delay in relation to reporting requirements in respect of issuance of Equity Shares by its Bank under the applicable laws.
- Its may breach third-party intellectual property rights.
- If the bank fail to adapt to technological advancements in the financial services sector it could affect the performance and features of its products and services and reduce the banj attractiveness to customers.
- Its lease or licence all of the bank's business premises and any failure to renew such leases or licences or their renewal on terms unfavourable to it may adversely affect its business, financial condition and results of operations and cash flows.
- Certain of its Directors are on the board of directors of companies engaged in a line of business similar to that of its. Any conflict of interest that may occur as a result could adversely affect its business, financial condition, results of operations and cash flows.
- RBI may remove any employee, managerial personnel or may supersede its Bank's Board of Directors in certain circumstances, which may materially affect its Bank's business, results of operations, and financial conditions.
- There may be conflict of interest between the BRLMs or their respective associates/ affiliates and the Bank.
- Any non-compliance with mandatory AML, KYC and CFT laws and regulations could expose it to liability and harm its business and reputation.
- The bank depends on its brand recognition. Any negative publicity or the bank's inability to further enhance awareness about its brand could damage its reputation and, in turn, affect its business, financial condition, results of operation and cash flows.
- While certain of its trademarks used by it for its business are registered, any inability to protect its intellectual property or know how from third party infringement may adversely affect its business and prospects.
- The bank has experienced negative cash flows in prior years.
- Its may face employee or labour disruptions that would interfere with its operations and have an adverse effect on the bank's business, financial condition, results of operations and cash flows.
- The bank depends on the accuracy and completeness of information about customers and counterparties and any misrepresentation, errors or incompleteness of such information could cause its business to suffer.
- The Bank has settled a matter with SEBI in the past in connection with allotment of Equity Shares to more than 49 investors.
- The bank is dependent on its key managerial personnel and members of senior management and other key personnel, and the loss of, or its inability to attract or retain, such persons could adversely affect its business, financial condition, results of operations and cash flows.
- If its were to incur a serious uninsured loss or a loss that significantly exceeds the limits of its insurance policies, it could have an adverse effect on its financial condition, results of operations and cash flows.
- Its Promoters, certain of the bank's Directors, Key Managerial Personnel and Senior Management have interests in it other than reimbursement of expenses incurred and normal remuneration or benefits.
- One of its Directors has not been able to trace certain records of his educational qualifications and the bank has relied on the certificate and affidavit furnished by him for such details of his profile, included in this Draft Red Herring Prospectus.
- Increasing regulatory focus on personal information protection could impact its business and expose it to increased liability.
- The bank has in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other selected statistical information related to its operations and financial condition. These non-GAAP measures and statistical information may vary from any standard methodology that is applicable across the financial services industry, and therefore may not be comparable with financial or statistical information of similar nomenclature computed and presented by other financial services companies.
- The bankruptcy code in India and other related laws may affect our rights to recover loans from our customers.
- If inflation were to rise in India, we might not be able to increase the prices of our services at a proportional rate in order to pass costs on to our customers and our profits might decline.
- Changing laws, rules and regulations and legal uncertainties, including adverse application of tax laws and regulations, across the multiple states we operate in, may have a material adverse effect on our business, financial condition, results of operations and cash flows.
The Issue type of Capital Small Finance Bank Ltd is Book Building.
The minimum application for shares of Capital Small Finance Bank Ltd is 32.
The total shares issue of Capital Small Finance Bank Ltd is 11176713.
Initial public offer of 11,176,713^ equity shares of face value of Rs. 10 each ("Equity Shares") of Capital Small Finance Bank Limited ("Bank" or "Issuer") for cash at a price of Rs. 468 per equity share (including a share premium of Rs. 458 per equity share) ("Offer Price"), aggregating to
Rs. 523.07^ crores (the "Offer"), comprising a fresh issue of 9,615,384^ equity shares aggregating to Rs. 450.00^ crores (the "Fresh Issue") and an offer for sale of 1,561,329^ equity shares aggregating to Rs. 73.07 crores (the "Offer for Sale"), comprising 836,728^ equity shares aggregating to
Rs. 39.16^ crores by Oman India Joint Investment Fund ii ("IJIF" II", 151,153^ equity shares aggregating to Rs. 7.07^ crores by Amicus Capital Private equity i llp (""ACPE"), 17,544^ equity shares aggregating to
Rs. 0.82^ crores by Amicus Capital Partners India fund i ("ACPIF", together with acpe, "Amicus", and together with ACPE, and OIJIF II, the "Investor selling shareholders"), and 555,904^ equity shares aggregating to
Rs. 26.02^ crores by certain persons listed in this prospectus (the "Other Selling Shareholders", as defined below) (the investor selling shareholders and the other selling shareholders, collectively, the "Selling Shareholders", and such equity shares offered by the selling shareholders, the "Offered Shares").
The face value of the equity shares is Rs. 10 each and the offer price is 46.80 times the face value of the equity shares.
^Subject to finalization of basis of allotment.