Jana Small Finance Bank is planning an IPO scheduled to open on February 7, 2024. As the name suggests, this bank is an Indian small finance bank that has brought significant revenue and profit margin growth over the last few years.check Jana Small Finance Bank IPOdates, size, objectives, reasons to invest, risk factors and reviews in this article.
Jana Small Finance Bank IPO details and dates
IPO start date | February 7, 24 |
IPO deadline | February 9, 24 |
IPO listing date | February 14, 2024 |
Type of problem | Book Built Issue IPO |
face value | 10 rupees per share |
IPO price range | 393 to 414 rupees per share |
lot size | 36 stocks |
Exhibition location | BSE and NSE |
Total issue size | Rs. 570 million |
Latest issue | Rs. 462 million |
OFS | Rs. 180 million |
About Jana Small Finance Bank Limited
The company is the fourth largest small finance bank in terms of assets under management (AUM) and deposit size as of September 30, 2023, according to a Fitch report. The company has 771 banking outlets, of which 278 are located in unbanked rural centers across 22 states and his two union territories. Since its founding in 2006, the company has served approximately 12 million customers and had 4.87 million active customers as of September 30, 2023.
The company was initially established as a Non-Banking Financial Company (NBFC) in 2008 and acquired the status of NBFC Microfinance Institution (NBFC-MFI) in 2013. It transitioned to a small finance bank in 2018 and became a scheduled commercial bank in 2019.
For 16 years, the company has developed a deep understanding of the financial needs of unbanked and underserved customers. We have improved the customer experience through digital sourcing and loan disbursements.
Major secured loan products include secured business loans, micro loans against real estate, MSME loans, affordable home loans, term loans to NBFCs, loans against fixed deposits, two-wheeler loans, gold loans, etc. Unsecured loan products include personal and small business loans, agricultural and related loans, and group loans using the joint and several liability group (JLG) model.
The company’s gross advances increased from Rs. 118,389.82 crore as on March 31, 2021 to Rs. 213.4 crore as on September 30, 2023, with emphasis on growth in secured gross advances and agricultural loans. This has increased significantly to Rs.71.3 million. Total secured advances increased from Rs 50,760 million as on March 31, 2021 to Rs 122,577.38 million as on September 30, 2023. Agriculture and allied loans increased from Rs 15,510.70 crore as on March 31, 2021 to Rs 36,141.39 crore as on September 30. , 2023.
Total collateral as a percentage of total advances increased from 42.87% as of March 31, 2021 to 57.42% as of September 30, 2023. Additionally, the share of agricultural and related loans in total advances increased from 13.10% as of March 31, 2021. 16.93% from March 31, 2021 to September 30, 2023.
Jana Small Finance Bank Limited Finance
Fiscal year end/period end (amount in billions) | ||||
Period ends | March 31, 2021 | March 31, 22 | March 31, 23 | September 30, 23 |
---|---|---|---|---|
assets | 19,078.66 | 20,188.71 | 25,643.69 | 28,105.87 |
revenue | 2,720.74 | 3,062.37 | 3,699.88 | 2,215.57 |
Profit after tax | 72.26 | 17.47 | 255.97 | 213.22 |
net worth | 1,100.77 | 1,184.56 | 1,777.07 | 2,547.11 |
reserves and surplus | 914.09 | 999.29 | 1,472.28 | 2,225.44 |
Total loan amount | 4,815.32 | 4,509.83 | 6,277.46 | 5,313.54 |
Jana Small Finance Bank IPO Valuation
- IPO price range ranges from Rs 393 to Rs 414 per share
- Considering the last three years’ weighted EPS of Rs 24.63, the P/E ratio is 17x.
- Considering last year’s FY23 EPS of Rs 42.64, the P/E ratio is 10x.
- Annualized EPS for the six months ending September 2023 yields a P/E ratio of 7x.
- Listed peers like Spandana Sphoorty Financial Limited have a P/E ratio of 665x (highest) and Ujjivan Small Finance Bank Limited has a P/E ratio of 10x (lowest), while the industry average P/E ratio is 93x. Therefore, the IPO price range of 10x to 17x P/E is perfectly priced when considered in the small finance banking segment.
Jana Small Finance Bank IPO target
The IPO size is Rs 570 crore and includes both OFS and new issue.
- OFS 180 million rupees – In the case of a sale, the proceeds are paid to the selling shareholders and the company receives nothing.
- 462 million rupees new issue – The fresh issuance will be used to strengthen the Bank’s Tier-1 capital base.
Why invest in Jana Small Finance Bank IPO?
- Digitalization and technological infrastructure: The company has embraced digital banking and offers a wide range of digital products and services to its customers. With integrated multichannel operations and automated back-end processes, the bank has increased efficiency, customer satisfaction, and business operations.
- Focus on innovation: The company is continuously innovating its technology platform to provide higher quality services. Leverage API technology and digital onboarding channels to improve customer experiences and increase operational efficiency.
- Integrated risk and governance framework: The company has a robust risk management framework in place, covering key risks such as credit, operational, liquidity, market, cyber and information security. We have detailed risk management policies and governance structures to ensure effective risk oversight.
- Customer-centric approach: The company has built a strong customer base with more than 16 years of experience serving unbanked and underserved customers. We promote financial inclusion by providing a variety of banking services customized to meet the diverse needs of our customers.
- Pan India Presence and Brand Awareness: The company has a wide presence across 22 states and two union territories in India, reducing concentration risks. To date, he has served nearly 12 million customers and has high brand recognition.
- Fast-growing retail deposit base: Since becoming a small finance bank, the company has focused on expanding retail deposits and offers a variety of deposit products. Its retail deposits have shown significant growth, contributing to lower cost of funds and improved stability.
- Proven execution ability: The company has demonstrated the ability to significantly expand its business operations with significant growth in deposits and advances over the years. Our focus on expanding our product offerings and reaching a broader customer base has been successful.
Jana Small Finance Bank IPO Risk Factors
- We are subject to inspections by various regulatory authorities, including the RBI, PFRDA, IRDA and the National Pension Scheme, and failure to comply with the observations of such regulators could have an adverse effect on our business.
- These are subject to strict regulatory requirements and prudential standards. Additionally, some of these regulatory requirements and prudential standards are more onerous for small finance banks than for other banks.
- There are irregularities in certain regulatory filings filed by them with the RoC under applicable law and there is delay in filing regulatory filings with the RBI. Moreover, some of its statutory and regulatory records are untraceable. They cannot guarantee that legal proceedings or regulatory action will not be initiated against the Bank in the future in connection with such missing or irregular filings of corporate records.
- We may be unable to maintain or renew the statutory and regulatory permits, licenses and approvals required to operate our business, which could adversely affect our business.
- As some employees have not updated their Aadhaar numbers with the Pension Fund Regulatory and Development Authority (PFRDA), the provident fund payments to them could not be deposited and the entire amount was transferred to escrow. . account. Once he receives her updated Aadhaar number, he will deposit the provident fund payments to such employee with PFRDA. These are subject to interest levy, which is payable on the amount required to be deposited with the PFRDA until the date the amount is deposited with her PFRDA.
Jana Small Finance Bank IPO Review – Should I subscribe?
- The company’s financial performance is stable, as evidenced by its consistent growth in assets, revenue, and profits in recent years. Moreover, reasonable valuations for IPOs, with P/E ratios in the range of 10x to 17x, offer investors a balanced proposition.
- However, there are regulatory risks for companies, where non-compliance issues can lead to penalties and revocation of approvals. Additionally, operating a business in a competitive environment poses challenges, especially when listed peer companies have different P/E ratios. Such developments may increase market uncertainty and affect investor sentiment.
High-risk investors are comfortable with all the risk factors listed below. Jana Small Finance Bank RHP You can invest in such IPOs.
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