Jana Small Finance Bank IPO - Play On Underserved Middle Income Group: IDBI Capital

IDBI Capital Report

Jana Small Finance Bank launched its initial public offering today and the offer will close for subscription on Feb 09. The 570 crore IPO comprises of both a fresh issue of Rs 462 crore and an offer for sale of Rs 26,08,629 crore of shares.

The bank has fixed the price band at Rs 393-414 apiece. The minimum order lot is 36 equity shares and in multiples thereafter.

Jana SFB is the fourth largest small finance bank in terms of assets under management as well as in terms of deposit size as on September 30, 2023.

As of Sep 30, 2023, Jana SFB has a rapidly expanded network with 771 banking outlets, including 278 banking outlets in unbanked rural centers, in 22 states and two union territories while serving 4.87 million active customers.

Jana has witnessed a robust AUM growth (25% CAGR FY21- FY23) and has also witnessed healthy deposit growth, at a CAGR of 15% FY21- FY23.

The bank has placed a strong emphasis on increasing their retail deposits, and with its low-cost, diversified retail deposit base, the bank has decreased its cost of funds from 8.61% FY21, to 7.02% FY23.

At upper price band, IPO is priced at price/book value of 1.2 times based on September 2023 with return on asset of 1.60%. We recommend Subscribe for long term.

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