Jana Small Finance Bank, an Indian lender, refiles for an IPO after pandemic-related delays. The offering includes fresh shares worth up to 5.75 billion rupees and an offer for sale of 4.1 million shares. The bank, known for its microfinance loans, aims to list within five years of starting operations as per regulatory requirements.
Jana Small Finance Bank, an Indian lender based in Bengaluru, has recently resubmitted its application for an initial public offering (IPO) after postponing its previous plan due to the pandemic. This comes as it approaches the end of the five years during which it can remain private according to local market regulations.
The IPO will consist of a fresh issue of shares valued at up to 5.75 billion rupees ($70 million) and an offer for sale of up to 4.1 million shares, as outlined in the draft herring prospectus. The bank has appointed Axis Capital, ICICI Securities, and SBI Capital Markets as the book-running lead managers for the IPO.
Jana Small Finance Bank started its operations as a small finance bank in March 2018. It had initially filed for an IPO in April 2021 but had to defer its fundraising plans due to the pandemic. The Reserve Bank of India mandates that all small finance banks must list within five years of commencing operations, which puts Jana Small Finance Bank on the path to going public.
As of March 31, microfinance loans constitute approximately 44.6% of the bank’s loan portfolio. The rest includes secured advances, such as loans to micro, small, and medium enterprises, non-banking finance companies, and gold loans. The bank has also accumulated deposits worth 163.3 billion rupees as of March 31.
Regarding its non-performing assets (NPA), the bank reported a total gross NPA of 7.09 billion rupees as of March 31, a decrease from 7.57 billion rupees in the previous year, resulting in an NPA ratio of 3.9%. This ratio is the highest among its peers, including AU Small Finance Bank, Equitas Small Finance Bank, and Ujjivan Small Finance Bank.
In the preceding year, as of March 31, 2021, the bank’s gross NPA ratio stood at 6.7%. Furthermore, Jana’s credit cost for 2022-23 reached 4.8%, which was higher than the figures reported in 2021-22 and 2020-21, which were 4.6% and 3.4%, respectively.
