Private equity Arpwood Partners-backed non-banking lender SBFC Finance Pvt Ltd.) on Tuesday filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) for an initial public offering (IPO).
The Mumbai-based lender, which is also backed by Clermont and Malabar Group, is looking to raise Rs 1600 crore through the IPO, according to its DRHP. The issue consists of a fresh issue of equity shares worth up to Rs 750 crore and an offer-for-sale (OFS) of up to Rs 850 crore by promoter and selling shareholders.
SBFC, which provides loans to entrepreneurs, small business owners, self-employed individuals, salaried and working-class individuals, will use the capital for “augmentation of its capital base to meet future capital requirements arising out of the growth of its business and assets,” it said in the filing.
Out of the existing shareholders, Clermont Group and Arpwood Partner will be exiting partially. The OFS will include Arpwood Partners Investment Advisors LLP selling up to Rs 398.19 crore, Arpwood Capital Private Limited selling up to Rs 97.73 crore, Eight45 Services LLP selling up to Rs 79.08 crore and Clermont group’s SBFC Holdings Pte. Ltd selling up to Rs 275 crore.
SBFC Finance said it may consider issuing shares on a private placement for up to Rs 150 crore. In that case, the company will reduce the size of the fresh issue.
The company was originally incorporated in 2008 as MapeFinserve Pvt Ltd. It was renamed as Small Business Fincredit India Pvt. Ltd in 2017. Later that year, it acquired the performing retail loans of Karvy Financial Services Ltd and focussed on building adequate systems and processes and rebooting the lending business. In 2019, its name was changed to SBFC Finance Pvt Ltd.
In the financial year (FY) 2022, the non-banking lender reported an operating revenue of Rs 529.05 crore, up 4% over the previous year. It reported a profit of Rs 64.52 crore in FY22.
SBFC has given loans to 80,073 customers and a net non-performing asset ratio of 1.57% as of June 2022. The company focuses on giving loans with a ticket size in the range of Rs 5 lakh to Rs 30 lakh, with 85% of the loans in the range. It is present across India in 104 cities with 135 branches.
The company’s assets under management have grown at the annual compounded rate of 39% to Rs 3,192.18 crore as of 31 March, 2022.