PRODUCT NOTE – IPO
Ujjivan Financial Services Limited
Public Issue of Equity Shares
Issue Highlights
PRODUCT NOTE – IPO
Issue opens: Thursday, April 28, 2016
Issue closes: Monday, May 2, 2016
Price Band: Rs. 207 – Rs. 210 per share
Bid Lot: 70 Equity Shares and in multiples thereafter
Face Value: Rs.10/- Listing: BSE NSE Industry: Financial Services
Registrar: Karvy Computershare Private Limited
Payment: Compulsorily ASBA Mode
Issue Size: Fresh Issue: Rs. 3581.61 million
Offer for Sale: 24,968,332 Equity Shares
Issue Break up:
PRODUCT NOTE – IPO
Promoters of Company
Ujjivan Financial Services Limited is a professionally managed company and does not have an identifiable promoter either in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”) or in terms of the Companies Act, 2013.
Business Overview
Ujjivan Financial Services Limited started its operations as an NBFC in 2005 with the mission of providing a full range of financial services to the economically active poor who are not adequately served by financial institutions. Its business is primarily based on the joint liability group lending model for providing collateral free, small ticket-size loans to economically active women. It also offers individual loans to Micro Small Enterprises (“MSEs”). On October 7, 2015, it was one amongst 10 companies in India, out of a total of 72 applicants, to receive in-principle approval from the RBI to set up a small finance bank (“SFB”). (Source: RBI Press Release)
The Company has adopted an integrated approach to lending, which combines a high customer touch-point typical of microfinance, with the technology infrastructure and related back-end support functions similar to that of a retail bank. Their integrated approach has enabled them to manage increasing business volumes and optimise overall efficiencies. A technology-enabled business model has been their strategic priority, and the back-end of their operations have a fully integrated IT platform.
The Company offers a diverse range of loan products to cater to the specific requirements of its customers. The products can be classified under two broad categories, namely, group loans and individual loans. Depending upon the end use, these products can be further sub-divided into agricultural, education, home improvement, home purchase and livestock loans.
Object of the Issue
The Offer comprises of the Fresh Issue and the Offer for Sale.
Offer for Sale
The Selling Shareholders will be entitled to the proceeds of the Offer for Sale of their respective portions of the Offered Shares, respectively net of their proportion of Offer related expenses. The fees and expenses relating to the Offer shall be shared in the proportion mutually agreed between the Company and the respective Selling Shareholders in accordance with applicable law. The Company will not receive any proceeds from the Offer for Sale.
Fresh Issue
The Company proposes to utilise the Net Proceeds from the Fresh Issue towards augmenting its capital base to meet future capital requirements.
Further, the Company expects to receive the benefits of listing of the Equity Shares on the Stock Exchanges, enhancement of Company’s brand name and creation of a public market for its Equity Shares in India. In addition, the Company intends to reduce its foreign shareholding in accordance with the requirements of the SFB In-principle Approval to set up an SFB.
PRODUCT NOTE – IPO
Source: BSE Note:
1. All financials are on a standalone basis for the financial year ended March 31, 2015
2. Revenue indicates revenue from operations
3. Net Income indicates the net profit after taxes and exceptional items
4. P/E ratio is calculated at closing share price (April 12, 2016, BSE)
5. EPS is as reported in the audit report filed with the stock exchanges
6. Net worth includes Equity Share capital and reserves surplus
7. RoNW is calculated as Net Income (as defined above)/Closing Net Worth (as defined above)
8. NAV per share is calculated as Net Worth/Equity Shares outstanding (both as on March 31, 2015)
9. Based on the above peer group information (excluding our Company), the highest P/E ratio is 36.58, the lowest P/E ratio is 17.53, and the average P/E ratio is 28.11
Consolidated Statement of Profit and Losses, as restated (Rs. In Millions)
Particulars / For the period ended / For the year ended31-Dec-15 / 31-Mar-15 / 31-Mar-14 / 31-Mar-13 / 31-Mar-12 / 31-Mar-11
Total Income / 7,296.40 / 6,118.81 / 3,576.62 2,339.29 / 1,563.03 / 1,564.43
Total Expenditure / 5,419.58 / 4,973.68 / 2,688.20 / 1,862.29 / 1,564.52 / 1,391.84
Profit after Tax / 1,223.06 / 757.88 / 584.16 328.70 / 1.33 / 116.92
E.P.S.(Rs.) Basic / 14.20 / 11.24 / 8.91 / 5.33
E.P.S.(Rs.) Diluted / 13.37 / 10.62 / 8.38 4.97
RONW (%) / *14.24 / 10.29 / 15.68 / 10.34
*Not Annualized
Note:
1. The EPS calculations have been done in accordance with Accounting Standard 20 – “Earnings per Share” issued by ICAI
2. The ratios have been computed as below:
a. Basic EPS (in `) = Net profit, after tax, as restated for the year/period, attributable to equity shareholders/Weighted average number of equity shares outstanding during the year/period
b. Diluted EPS (in `) = Net profit, after tax, as restated for the year/period, attributable to equity shareholders/Weighted average number of dilutive equity shares outstanding during the year/period
An indicative timetable in respect of the Issue is set out below:Finalization of Basis of Allotment with the Designated Stock Exchange / May 5, 2016
Initiation of refunds/un-blocking of ASBA Accounts / May 6, 2016
Credit of Equity Shares to demat accounts of Allottees / May 9, 2016
Commencement of trading of the Equity Shares on the Stock Exchanges / May 10, 2016
The above timetable is indicative and does not constitute any obligation on Company or the Selling Shareholders or the BRLMs.
Retail Payment Chart ‐ Ujjivan Financial Services LimitedIssue Dates 28‐April‐2016 to 2‐May‐2016
Price Band INR 207 – INR 210
Bid Lot 70 Equity Shares in multiples thereafter
No. of Shares Cut off price per share Rs.210/‐ Total Amount (Rs.)
70 210 14700
140 210 29400
210 210 44100
280 210 58800
350 210 73500
420 210 88200
490 210 102900
560 210 117600
630 210 132300
700 210 147000
770 210 161700
840 210 176400
910 210 191100
PRODUCT NOTE – IPO