Utkarsh Small Finance Bank to Allot Shares Through Rs 949-Crore Rights Issue

Strategic Insights -

Utkarsh Small Finance Bank, a lender struggling financially, is set to allot shares to a group of investors, including a fund house run by Madhusudan Kela and HDFC Life, through a Rs 949-crore rights issue. The bank received applications from new investors for about 450 million fully paid-up equity shares, covering two-thirds of the issue. The development led to a surge in investor interest on the bank, with its share price rallying nearly 20% on the BSE.

Key Takeaways:

  • Utkarsh Small Finance Bank is conducting a Rs 949-crore rights issue to allot shares to a group of investors, including FLC Investco, Kotak Mahindra Life Insurance, and ICICI Prudential Life Insurance.
  • The bank received applications for about 450 million fully paid-up equity shares, covering two-thirds of the issue, with the largest interest shown by Cohesion MK Best Ideas Sub-Trust, applying for over 5.71 crore shares.
  • The price of the issue was fixed at Rs 14 per share, with the entire issue price payable at the time of making the application.
  • The issue will close on November 3, and Utkarsh CoreInvest, the promoter of the bank, holds 68.92% of the shares, while institutional investors hold 13.14%.
  • RBL Bank received regulatory permission to make fresh investment in Utkarsh Small Finance Bank via the latter's rights issue.

Statistics:

  • Rs 949 crore: The size of the rights issue
  • 450 million: The number of fully paid-up equity shares applied for by new investors
  • 2/3: The portion of the issue covered by new investor applications
  • 68.92%: The holdings of Utkarsh CoreInvest, the promoter of the bank
  • 13.14%: The holdings of institutional investors
  • Rs 14: The price of the issue per share
  • 11.4%: The gross non-performing assets ratio of Utkarsh Small Finance Bank at the end of June
  • Rs 239 crore: The net loss of Utkarsh Small Finance Bank for the first quarter of the fiscal
  • 55%: The portion of the bank's total portfolio of Rs 19,224 crore that is unsecured loans

Sources:

  • "Utkarsh Small Finance Bank to allot shares via Rs 949 crore rights issue" (times of india) [1]
  • "RBL Bank gets regulatory nod for fresh investment in Utkarsh Small Finance Bank" (times of india) [2]