SEBI Places SK Finance's Rs 2,200-Crore IPO On Hold

Even as the Securities and Exchange Board of India approved four IPOs, it has kept the proposed initial share sale of vehicle finance and business loan-focused non-bank lender SK Finance Ltd. in "abeyance."

SEBI has kept the Rs 2,200 crore IPO on hold without disclosing the reason. The regulator, in a notice on Friday, said the "issuance of observations (has been) kept in abeyance."

The Jaipur-based lender filed its preliminary papers with SEBI in May this year. The draft documents indicate that SK Finance's initial public offering comprises the fresh issuance of equity shares valued at Rs 500 crore, along with an offer for sale by promoters and investor shareholders of up to Rs 1,700 crore. The equity shares of the company are proposed to be listed on the NSE and BSE.

Norwest Venture Partners X-Mauritius and TPG Growth IV SF Pte. will sell shares worth Rs 700 crore each, while Evolvence Coinvest I will offload shares to the tune of Rs 75 crore, and Evolvence India Fund III Ltd will sell shares worth Rs 25 crore as part of the OFS.

According to the draft red herring prospectus, the promoter, Rajendra Kumar Setia, will offload shares aggregating to Rs 180 crore, while Rajendra Kumar Setia HUF will sell a stake worth Rs 20 crore.

SK Finance intends to use the proceeds from the new issue to enhance its capital base, which will support the company's future business needs, including onward lending and general corporate objectives.

The non-banking financial company operates in vehicle financing and financing for micro, small, and medium enterprises. As of December 2023, it had expanded its reach to 11 states and one Union Territory, with a network of 535 branches.

Earlier this year, the company raised Rs 1,328 crore from investors. Motilal Oswal Private Equity pumped in Rs 415 crore for a minority stake in the NBFC.

Kotak Mahindra Capital Co., Jefferies India Pvt., Motilal Oswal Investment Advisors Ltd. and Nomura Financial Advisory and Securities (India) Pvt. are the book-running lead managers for the issue.