ESAF Small Finance Bank, headquartered in Thrissur, Kerala, has received approval from the Securities and Exchange Board of India (SEBI) to initiate an initial public offering (IPO). This development places ESAF among several Kerala-based firms that will enter the capital markets within the next 12-18 months. ESAF’s IPO consists of a fresh issue valued at up to Rs 486.74 crore, as well as an offer for sale amounting to Rs 142.30 crore by promoters and other selling shareholders. The offer for sale component comprises contributions of up to Rs 119.26 crore from ESAF Financial Holdings Pvt Ltd, up to Rs 12.67 crore from PNB MetLife India Insurance Company Ltd, and up to Rs 10.37 crore from Bajaj Allianz Life Insurance Company Ltd. It’s worth noting that ESAF had previously filed preliminary IPO papers with SEBI in July 2023, marking its third attempt to enter the capital markets. The initial approval from SEBI was granted in March 2020, but the issue size was higher at that time, totaling Rs 976 crore, including a primary issuance of Rs 800 crore. The company has also mentioned the possibility of a further equity share issue by private placement or other means, aggregating up to Rs 97.33 crore, which could reduce the fresh issue size.
In addition to ESAF, several other Kerala-based companies are preparing for IPOs. Popular Vehicles and Services Ltd. is planning to raise Rs 250 crore through a combination of fresh issue of shares and an offer for sale of approximately 1.43 crore shares. Fedbank Financial Services (FedFina), the NBFC arm of Federal Bank, has plans to raise Rs 1,400 crore through an IPO, which is expected to enter the market before the end of this financial year. Asirvad Micro Finance Ltd (AMFL), a subsidiary of Manappuram Finance Ltd, has filed a Draft Red-Herring Prospectus (DRHP) for a Rs 1,500 crore IPO. Additionally, Muthoot Microfin, another Kerala-based company, aims to venture into the primary markets over the next 18 months, with plans to collect Rs 1,000 crore through an IPO.
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