February 28, 2024

Jana Small Finance Bank raises funds ahead of RHP filing for IPO

Bengaluru-based Jana Small Finance Bank has raised Rs 113.15 crore from several investors in a pre-IPO placement.

It undertook a pre-IPO placement of around 1.21 crore compulsorily convertible preference shares (CCPS) at an issue price of Rs 10 each, amounting to Rs 12.16 crore, TPG Asia and Amansa Holdings-backed SFB told investors.

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It also issued around 24.4 lakh equity shares at Rs 414 apiece through private placement for a total value of Rs 101 crore.

SBI General Insurance Company, Kotak Mahindra Life Insurance Company, and Ananta Capital Ventures Fund 1 were the biggest investors, picking up shares worth Rs 25 crore, Rs 20 crore, and Rs 15 crore, respectively.

“The pre-IPO placement has been undertaken pursuant to the approval of the board of directors on August 11, 2023, and January 15, 2024, and shareholders on September 4, 2023 and January 18, 2024,” Jana SFB said.

In a pre-IPO offer, a company sells a sizeable chunk of shares privately before  it goes public through the issue. While the buyer gets the shares at a discount from the IPO price, for the company, the placement is a way to raise funds and offset IPO risks.

The CCPS will be converted into 4,01,149 equity shares before filing the red herring prospectus with the Registrar of Companies (ROC) for the initial public offering.

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In the preliminary papers filed in July, the small finance bank had said it may raise Rs 115 crore through a pre-IPO placement.

Madhu Silica, Navatris Investments, Dhoot Industrial Finance, Anil Singhvi, Capri Global Holdings, RPM Venture Partners, Negen Undiscovered Value Fund and S Four Capital were among the 16 investors who received equity shares in a pre-IPO placement.

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The IPO will be a mix of fresh issue of shares worth Rs 575 crore and an offer-for-sale of 40,51,516 shares by six investors.

The fund-raise will amount to Rs 742.73 crore if one considers the pre-IPO placement price of as Rs 414.

The SFB plans to use net fresh issue proceeds for augmenting its Tier – 1 capital base, while the OFS funds will go to the selling shareholders.

With 754 outlets, Jana SFB was the fourth largest small finance bank in terms of AUM and in terms of deposit size at the end of FY23.

Promoter Jana Holdings owns 33.76 percent stake in the bank and the remaining 66.24 is held by public shareholders, including TPG Asia VI SF Pte Ltd, Amansa Holdings, Volrado Venture Partners Fund, Dovetail India Fund, Tree Line Asia Master Fund (Singapore), and ICICI Prudential Life Insurance Company.

Axis Capital, ICICI Securities and SBI Capital Markets are the lead managers to the issue.