Singapore-based non-banking finance company (NBFC) SBFC Finance, backed by Clermont Group, is set to launch its initial public offering (IPO) on August 3. The IPO aims to raise Rs 1,025 crore, with a combination of fresh issuance of shares worth Rs 600 crore and an offer for sale (OFS) of Rs 425 crore by the promoters. With a focus on the MSME sector, SBFC Finance has recorded impressive financial performance, attracting investor interest as it enters the public market.
Offer Details and Timeline:
The public issue will remain open for subscription from August 3 to August 7. Before the IPO filing, the company raised Rs 150 crore through a private placement of 2.72 crore equity shares, resulting in a reduction of the fresh issue size to Rs 600 crore. The anchor book will be open for bidding on August 2, and the price band for the offer will be revealed soon.
Strong Financial Performance:
In the financial year 2022-23 (FY23), SBFC Finance achieved a substantial profit of Rs 149.74 crore, representing a significant growth from Rs 64.8 crore in the previous year. Its revenue from operations also witnessed impressive growth, reaching Rs 732.8 crore, a 38.5 percent increase compared to the previous year. The net interest income surged by 49 percent to Rs 379 crore in FY23, contributing to a net interest margin of 9.32 percent.
Robust Asset Quality:
SBFC Finance’s asset quality has exhibited consistent improvement year-after-year. In FY23, the gross non-performing assets (NPA) as a percentage of gross advances reduced to 2.43 percent from 2.74 percent in FY22. The net NPA also decreased to 1.41 percent from 1.63 percent during the same period. The provision coverage ratio improved to 42.04 percent, enhancing the company’s resilience in managing credit risk.
Growing Assets Under Management (AUM):
The NBFC’s assets under management (AUM) reached Rs 4,942.8 crore as of March FY23, indicating a remarkable growth of nearly 55 percent compared to Rs 3,192.2 crore in the previous financial year. This substantial increase in AUM reflects the company’s ability to attract borrowers and expand its lending operations.
Utilization of IPO Proceeds:
The funds raised through the IPO will be utilized to strengthen the company’s capital base, enabling it to meet future capital requirements arising from business growth and asset expansion. The IPO is an essential step for SBFC Finance to leverage the buoyant capital markets and secure additional financial resources for its expansion plans.
The upcoming SBFC Finance IPO is poised to raise Rs 1,025 crore and is backed by strong financial performance, robust asset quality, and significant AUM growth. With a focus on the MSME sector and strategic utilization of the IPO proceeds, the company aims to further strengthen its position in the market. Investors and stakeholders eagerly anticipate the IPO’s response, as it represents an opportunity to participate in the growth journey of a promising NBFC backed by Clermont Group’s support.
SBFC Finance’s decision to enter the public market comes at a time when investor interest in the financial sector is on the rise. The company’s impressive financial performance, driven by a diversified loan portfolio and prudent risk management practices, has attracted attention from investors seeking exposure to the dynamic NBFC space. As it prepares for the IPO, SBFC Finance aims to capitalize on the positive market sentiment and channel the raised funds towards expanding its lending operations, enhancing technology capabilities, and exploring new growth avenues.