Fincare Small Finance Bank has resubmitted its draft IPO documents to the Securities and Exchange Board of India, the capital markets regulator.

The IPO consists of a fresh issue of shares worth Rs 625 crore and a proposal by shareholders and promoters to sell up to 17 million shares. The company had earlier submitted a draft IPO document in May 2021, in which it issued Rs 330 crore of new shares and Rs 1,000 crore of OFS.

The revised OFS includes 14.93 million shares in Fincare Business Services, 4.71 lakh shares in Wagner Ltd, 4.44 lakh shares in True North Fund LLP, 4.31 lakh shares in Indium IV (Mauritius) Holdings Ltd, 2.24 lakh shares in Omega TC Holdings Pte Ltd, 1.31 lakh shares in LeapFrog Rural, Kotak Mahindra Life Insurance holds 1.26 lakh shares and Edelweiss Tokio Life Insurance holds 1.17 lakh shares.

Proceeds from the newly issued shares will increase the bank’s Tier 1 capital base to meet its future capital needs. As of March 2022, Fincare’s total capital to risk (weighted) assets ratio was 22.32%.

ICICI Securities, Axis Capital, IIFL Securities, SBI Capital Markets and Ambit Pvt Ltd are the lead managers for the offering.

Fincare is a digital-first small financial bank focused on unbanked and underbanked customers, especially in rural and semi-urban areas.

Fincare is a Bangalore-based microfinance institution that turned into a small finance bank. It was one of 10 of 72 applicants approved for conversion.

Before the switch, the microfinance institution was mainly run by two entities, Disha Microfin in western India and Future Financial Services in southern India, managed by a management team. It started banking operations in July 2017.

For FY22, the lender reported a 92% drop in its net profit to Rs 8.87 crore. Net interest income rose 25% to Rs 876 crore. Gross NPAs rose 7.79% by the end of FY22 from 6.42% last year, while net NPAs were 3.55%, compared to 2.8% a year ago.

The lender has deep rural franchises and over 15 years of microfinance experience. As of March 2022, it covered 48,542 villages, 2.39 million pyramid households and 2.35 million rural savings accounts.

It has a pan-India network of 919 banking outlets (including 246 commercial agent outlets) and 125 ATMs, 90 of which are cash collection points in 14 states and three union territories, covering 255 districts.