SEBI nods to Jana Small Finance Bank’s IPO

Jana Small Finance Bank confirmed receiving SEBI’s approval to launch its latest initial public offering. The company’s DRHP shows that this IPO will comprise fresh issuance of equity shares worth Rs. 700 crores.

The small finance bank had previously filed its draft papers with market regulator SEBI in April this year, approximately a week after its listing deadline.

The observations from SEBI came on 9 July, allowing the bank to launch its proposed IPO.

A brief look at Jana Small Bank

Jana Small Finance Bank is one of India’s prominent digitalised lending institutions. It received its banking licence from the RBI in April 2017.

This bank offers a number of financial products to help underbanked customers. These include:

• Collateral-free loans
• Zero balance savings account
• Fixed deposits
• Housing loan schemes

Besides, the organisation also extends gold loans and specific products for vehicles, MSMEs, and agriculture, among others.

Jana Small Bank has its headquarters located in Bangalore. It was one of the ten financial institutions to receive RBI’s in-principle approval in 2015 for a small finance bank.

Titbits about Jana Small Bank’s upcoming IPO

Here are a few insights on Jana Small Finance Bank’s latest IPO –

• Jana Small Bank’s latest IPO will see a listing of 92,53,659 freshly issued company shares.
• The latest offer for sale will include shares from notable organisations like ICICI Prudential Life Insurance Company, Bajaj Allianz Life Insurance Company, Tree Line Asia Master Fund (Singapore) Pte Ltd., North Haven Private Equity Asia Platinum Pte Ltd., Enam Securities, QRG Enterprises, and Hero Enterprise Partner Ventures.
• Merchant banking sources report a prediction of proceeds worth Rs. 1,100 crores from this IPO.

Besides, the bank is also considering a pre-IPO placement for risk mitigation.

In talks of a pre-IPO placement

Jana Small Bank’s probable pre-IPO placement, if undertaken, is expected to worth Rs. 500 crores approximately. This placement may also include a further issue worth up to Rs. 400 crores on average for its promoters.

Individuals interested in purchasing shares from this offering can benefit significantly. Shares in this offering will be at a discounted price than that in the actual IPO. Companies generally undertake such offerings to raise funds beforehand to compensate for losses from the actual IPO.

Interested buyers can check the importance of investing in pre-IPO companies before proceeding with a purchase when the offer launches.

Jana Small Bank will launch and complete their pre-IPO placement, if any, before filing the RHP with the Registrar of Companies.

Parting words

This upcoming IPO will be a great step ahead for Jana Small Bank. This is because it plans to utilise raised funds to finance its future capital demands and expand its Tier-I capital base.

It can also use these proceeds to fund expenses related to this fresh issue. The company clarified that in the case of a pre-IPO placement, it would deduct such proceeds from the actual IPO. This can also serve double benefits to potential buyers.

Frequently asked questions

When did Jana Small Finance Bank start operating?

Jana Small Finance Bank started its operations on 28 March 2018.

Who are Jana Small Finance Bank IPO’s merchant bankers?

The merchant bankers to Jana Small Bank’s IPO are ICICI Securities, Axis Capital, and SBI Capital Markets.

Who is the CEO of Jana Small Finance Bank?

Ajay Kanwal