The holding company of Fincare Small Finance Bank (Fincare SFB) is planning to get listed on the exchanges before the end of the current fiscal. The bank, meanwhile, is aiming to raise about ₹200 crore to ₹250 crore over the next 12-18 months, according to a top official.
“We are planning to list our holding company Fincare Business Services Ltd. before the end of the current fiscal,” said Rajeev Yadav, MD and CEO, Fincare Small Finance Bank.
“We are also planning to raise ₹200 crore to ₹250 crore for funding our expansion plans,” he added. The SFB had recorded 65% growth in its loan book last year and aims to achieve similar growth this year, too.
Value dilution
Asked whether the listing of the holding company on the stock exchanges ahead of the bank would not dilute shareholders’ value when the SFB itself was listed, he said there were only two options viz. to list the holding company first or the bank.
“All our current shareholders are at the holding company level. We need to give a liquidity option to our current shareholders.
“Obviously, the bank has to be listed in the long term. Till these two are merged, we have to work on a scenario wherein both these entities will get listed,” he said.
“The holding company [Fincare Business Services Ltd.] is the promoter of the bank. Currently, it holds 90% stake. First, we intend to list the holding company, and then bring down its stake in the bank to 40% as per RBI norms.”
Mr. Yadav said the management was not in a hurry to list the SFB as norms permitted time till FY23 for Fincare’s listing. The evaluation exercise was currently on. The listing would be done over the next 12-18 months.
On Wednesday, Mr. Yadav inaugurated Fincare’s third branch in the city and said the target was to open about 130 branches across India in the current fiscal, taking the total to 700.
Focus on new products
Currently, the bank has a gross non-performing asset (NPA) ratio of 1.3% and net NPA ratio of 0.3%. He said the aim was to bring down the GNPA ratio to 1%.
He said the focus this fiscal would be on new products such as affordable housing and two-wheeler loans. This would mean bringing down its lending to the microfinance sector from the current 80% of total lending, to 50-60% over the next three-four years.
Last year, the bank conducted total business of ₹5,500 crore. This year, it aims to do about ₹8,000-₹9,000 crore.
