AU Small Finance Bank to launch Rs1,900 crore share sale on 28 June


Mumbai: Jaipur-based AU Small Finance Bank Ltd, which serves low and middle-income individuals and businesses, plans to launch its approximately Rs1,900 crore initial public offering (IPO) on 28 June.

A price band of Rs355-358 per share has been set for the small finance bank’s initial share sale which will close on 30 June.

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AU promoter Sanjay Agarwal and private equity investors Warburg Pincus, World Bank arm International Finance Corp., ChrysCapital and Kedaara Capital will sell part of their stakes in the IPO, which is a pure offer for sale.

Collectively, all the selling shareholders are offering 53.42 million shares, which at the upper end of the price band would mean an IPO size of Rs1,912.5 crore. The IPO values the company at a little more than $1.5 billion.

AU was established in 1996 in Jaipur.

ICICI Securities Ltd, HDFC Bank Ltd, Motilal Oswal Investment Advisors Ltd and Citigroup Global Markets India Pvt. Ltd are managing the share sale.

AU is the third of the 10 companies that were approved by the Reserve Bank of India (RBI) in September 2015 for setting up small finance banks to initiate work on selling shares to the public.


Chennai-based microfinance lender Equitas Holdings Ltd and Bengaluru-based Ujjivan Financial Services Ltd launched their IPOs almost a year ago.

AU launched its small finance bank operations in April.

According to the management, the bank has been able to collect deposits worth Rs600 crore from 40,000 customers post conversion. Of this, Rs180 crore is bulk deposits, while the rest is retail.

By next March, the bank expects to have 500-plus branches which will offer all products, the management said at a press conference on Monday. The company plans to set up an additional 162 branches during fiscal 2018, according to the IPO prospectus.

Currently, AU has close to 300 branches.

On the lending side, the company has three business lines—vehicle finance, micro, small and medium enterprise (MSME) loans and small and medium enterprise (SME) loans.

In fiscal 2017, the average ticket size of AU’s vehicle finance loans was Rs3.4 lakh, while the MSME loans and SME loans businesses had average ticket sizes of Rs10.8 lakh and Rs2.1 crore, respectively.

As of 31 March, total assets under management (AUM) were Rs10,733.8 crore. The AUM of vehicle financing, MSME and SME loan businesses stood at Rs5,395.6 crore, Rs3,216.3 crore and Rs2,121.8 crore, respectively.

For fiscal 2017, the company reported a revenue of Rs1,430.5 crore against Rs1,051.9 crore the previous year. It reported a profit of Rs842.7 crore against a profit of Rs247.1 crore in the previous year.

The IPO comes at a busy time for the primary market in India. Last week, telecom equipment maker Tejas Networks Ltd raised Rs776 crore through its initial share sale. Currently, two more firms—Eris Lifesciences Ltd and Central Depository Services (India) Ltd—are in the process of raising funds through public offerings. Cable TV and broadband services provider GTPL Hathway Ltd is launching its Rs484.8 crore initial share sale on 21 June. Collectively, these firms will raise over Rs5,500 crore.

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