Kolkata: Kolkata: Promoters in Suryoday Small Finance Bank are looking to put more skin in the game by putting around Rs 60 crore before the bank hits the capital market for raising another Rs 200-225 crore equity later in the year.
Promoters equity infusion would help them maintain a minimum 26% shareholding even after raising capital from other investors. Promoters hold 29% in the small bank while institutional investors have 58.8% interest.
Suryoday Managing Director R Baskar Babu confirmed it saying that the plan is subject to regulators approval.
He said shareholders have approved promoters plan to subscribe about 45 lakh shares at Rs 140 apiece.
Reserve Bank of Indias stipulation requires Suryoday to lock in promoters contribution at 26% for five years from January 2017, when it transformed itself into the bank from its previous avatar of a microfinance company.
RBI norm for small finance banks typically mandates promoter's minimum contribution at 40% with a 12 year window to pare it down to 26%. However, the entities which had already lowered promoters holding to below 40% but above 26%, they are allowed it keep it at minimum 26%.
After receiving the capital injection from promoters, Suryoday will hit the capital market. It has hired Edelweiss Financial Services to manage it.
Backed by International Finance Corporation, the small bank has decided to invite both existing and new investors for capital.
“We plan to complete this exercise by FY19. The fresh capital will take care of our business growth for next two years,” said Babu, who holds 8% in it.
The fresh capital will also help it diversify investor base before its goes for public listing which is intended in 2020.
IFC has 6.5% interest in the small finance bank as on March while Sarva Capital is the largest shareholder with 9.06%, according to the banks annual report.
The new bank has about Rs 2150 crore as advances and Rs 960 crore as deposits at present.
Micro loans contributes 90% of its portfolio while it is looking to squeeze the weightage to 80% this year by expanding its other lending businesses such as shop keeper loans, affordable housing loans and commercial vehicle loans.
“We dont have any plan in the two-wheeler segment as this segment is very much crowded,” Babu said.
Suryoday has 9.5 lakh borrowers and 25000 depositors. Interestingly, merely 500 of its existing micro borrowers have deposits in Suryoday.
“Raising deposits from micro borrowers is costly. But this will help in data analytics which will be crucial for doing business in future,” the MD said, adding that Suryoday would be looking to raise deposits from 50% of its existing borrowers this year.
On the advances side, the target is to raise it to Rs 3000 crore by March 2018, he said.