SBFC Finance
Book Building issueMainboard₹1,025 Cr issue
+43.84%
Listing gain over issue price
Issue size
₹1,025 Cr
1 lot at cut-off
₹14,820
Lot size
260shares
Open
03 Aug 2023
Close
07 Aug 2023
Allotment
10 Aug 2023
Listing
16 Aug 2023
Listing performance
Issue price
₹57
Listed at
₹81.99
Listing-day close
₹92.21
Latest price
₹79.82
Close on 23 Oct 2026
Listing gain
+43.84%
Return since issue
+40.04%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 03 Aug 2023 – 07 Aug 2023
- Listing date
- 16 Aug 2023
- Face value
- ₹10 per share
- Issue price
- ₹57 per share
- Lot size
- 260 shares
- Issue type
- Book Building issue
- Total issue size
- ₹1,025 Cr
- Market cap at offer price
- ₹6,066 Cr
- Promoter holding
- 78.83% → 64.03% pre-issue → post-issue
- ISIN
- INE423Y01016
- Registrar
- Kfin Technologies Ltd.
- Lead managers
- ICICI Securities Ltd.
- Registered office
- 103, 1st Floor, C&B Square, Sangam Complex, Andheri Kurla Road, Village Chakala, Andheri (East), Maharashtra
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 5,34,07,893 | — | — |
| Market maker | 0 | — | — |
Application size
Minimum 260 shares per lot, in multiples, at ₹57
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 260 | ₹14,820 |
| Retail (max) | 13 | 3,380 | ₹1,92,660 |
| S-HNI (min) | 14 | 3,640 | ₹2,07,480 |
| S-HNI (max) | 67 | 17,420 | ₹9,92,940 |
| B-HNI (min) | 68 | 17,680 | ₹10,07,760 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
5,34,07,893
Anchor portion
₹304 Cr
at ₹57 per share
Valuation and performance
Valuation at offer price
₹57 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 1.25 | — |
| P/E (×) | 45.60 | — |
| Market cap | — | ₹6,066 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 7.97%
- Debt / equity
- 2.20
- NAV per share
- ₹19.26
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About SBFC Finance
SBFC Finance Limited, originally incorporated as MAPE Finserve Private Limited on January 25, 2008 and subsequently renamed to its current name, is a non-banking financial company registered with the Reserve Bank of India. The company operates as an NBFC-ND-SI (systemically important non-deposit taking NBFC) providing loans including secured Micro, Small and Medium Enterprises loans and loans against gold. The majority of the company's borrowers are entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals. As of March 31, 2023, 81.33% of the company's total AUM of Secured MSME Loan customers are self-employed. The company has demonstrated significant growth, with AUM increasing at a CAGR of 44% from Fiscal 2019 to Fiscal 2023, and healthy disbursement growth at a CAGR of 40% between Fiscal 2021 and Fiscal 2023. The company earns revenue primarily through interest income on loans and other financial services.
Company Analysis
from RHPSBFC Finance Limited is a systemically important, non-deposit taking NBFC offering secured MSME loans and loans against gold, primarily to entrepreneurs, small business owners, self-employed individuals, and salaried individuals.
SBFC Finance Limited, originally incorporated as MAPE Finserve Private Limited on January 25, 2008 and subsequently renamed to its current name, is a non-banking financial company registered with the Reserve Bank of India. The company operates as an NBFC-ND-SI (systemically important non-deposit taking NBFC) providing loans including secured Micro, Small and Medium Enterprises loans and loans against gold. The majority of the company's borrowers are entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals. As of March 31, 2023, 81.33% of the company's total AUM of Secured MSME Loan customers are self-employed. The company has demonstrated significant growth, with AUM increasing at a CAGR of 44% from Fiscal 2019 to Fiscal 2023, and healthy disbursement growth at a CAGR of 40% between Fiscal 2021 and Fiscal 2023. The company earns revenue primarily through interest income on loans and other financial services.
NBFC (Non-Banking Financial Company)Microfinance and MSME LendingGold LoansRetail Finance
Objects of the Issue
- Augmenting the capital base of our Company ₹5,590.83 million p.25
- Repayment of borrowings p.68
- General corporate purposes p.68
- Repayment of borrowings
- Funding capex for expansion of branch network and technology infrastructure
- General corporate purposes
Issue Structure
- Total Issue
- ₹10,250 million
- Fresh Issue
- ₹6,000 million (105,328,548 Equity Shares)
- Offer for Sale
- ₹4,250 million (74,561,402 Equity Shares)
- Price Band
- ₹54 to ₹57 per Equity Share
- Lot Size
- 260 Equity Shares and in multiples of 260 Equity Shares thereafter
- Face Value
- ₹10 per Equity Share
Business Model
The company generates revenue through the interest earned on its loan portfolio, which consists primarily of secured MSME loans and loans against gold. As of March 31, 2023, interest income represented 88.36% of total income. The company disburses loans to self-employed individuals, small business owners, and salaried individuals, with 96.44% of its gross loan book being secured. The company sources funding through debt securities, bank borrowings, securitization of loans, and equity capital.
Business Segments
Provides secured loans to Micro, Small and Medium Enterprises, including small business owners and self-employed individuals. These loans are typically secured by immovable property or other collateral.
Provides loans secured by gold jewellery as collateral to customers. As of March 31, 2023, this represents a portion of the company's total loan portfolio with an average LTV of 68.51% on origination basis.
Provides secured loans to small and medium-sized enterprises at mutually agreed ratio through co-origination with ICICI Bank and standalone lending
Provides gold-backed loans to customers, with AUM of ₹8,641.02 million representing 17.48% of total AUM as of March 31, 2023
Offers financial solutions to entrepreneurs and MSMEs with average ticket size of ₹0.99 million and average tenure of 9.84 years; collections occur on installment basis; as of March 31, 2023, 89.49% of collections were non-cash based EMI collections; services over 34,738 borrowers
Borrowers pledge gold jewellery to obtain loans up to 75% of gold item's value; minimal documentary and credit assessment requirements; average ticket size ₹0.09 million with average tenure of 11 months; 'Gold Genie' application enables home disbursal; services 59,437 borrowers as of March 31, 2023; collections occur on monthly interest payment basis
Comprises unsecured personal loans, business loans, and professional loans; average ticket size for personal loans ₹0.69 million with average tenure of 4.83 years; collections occur on installment basis; discontinued disbursal from September 2022
Loans provided to Micro Enterprises secured by residential or commercial property.
Loans offered against gold collateral, described as offering superior yields with almost liquid security assets.
Unsecured personal loans and unsecured business loans provided to borrowers.
Provides secured loans against registered/equitable mortgage of property
Provides secured loans against hypothecation of gold assets
Provides unsecured business loans, some guaranteed by Credit Guarantee Fund Trust for Micro and Small Enterprises
Loans provided to micro, small and medium enterprises with focus on ticket size between ₹0.50 million and ₹3.00 million
Loans provided against gold collateral, with average ticket size of ₹0.09 million
Activities of a systemically important non-deposit accepting non-banking financial company
Retail lending business
SWOT Analysis
Strengths
- • Strong MSME-focused NBFC with high AUM growth among peers(p.25)
- • Healthy disbursement growth trajectory(p.25)
- • Strong capital adequacy position(p.39)
- • Improving asset quality with decreasing NPA ratios(p.34)
- • Secured lending portfolio with low average LTV ratios(p.34)
- • Established co-origination partnership with ICICI Bank providing significant AUM and disbursement volume(p.47)
- • Diversified product portfolio across Secured MSME Loans and Loans Against Gold(p.48)
- • Highest AUM growth among MSME-focused NBFCs with 44% CAGR (FY2019-FY2023)(p.205)
- • Strong focus on underserved ₹0.50-3.00 million ticket segment with low NPA ratio(p.206)
- • Outperforming portfolio quality relative to sector peers in target segment(p.206)
- • Extensive pan-India presence with lowest state concentration among MSME NBFCs(p.206)
- • Technology-enabled, centralized lending platform supporting rapid scaling(p.206)
- • Strong collections infrastructure with high non-cash EMI adoption(p.206)
- • Direct sourcing model enabling high customer satisfaction and loyalty(p.206)
- • Diversified geographic presence with strong penetration across 16 states and 2 union territories reduces concentration risk(p.209)
- • 100% in-house loan sourcing model with 1,911 personnel enables better credit quality control and customer relationships(p.210)
- • Rigorous credit assessment framework with 82.32% of Secured MSME customers having CIBIL scores above 700(p.211)
- • Superior asset quality with Gross NPA of 2.43% vs. industry average of 4.2% for peer NBFC segment(p.224)
- • Extensive on-ground collections infrastructure with three-tier collection system and 89.49% non-cash EMI collections reduces credit risk(p.213)
- • Strong AUM growth at 49.17% CAGR (FY2021-FY2023) with expanding market share in tier II/III markets(p.217)
- • Experienced management team backed by marquee institutional investors (Clermont Group, Arpwood Group, Malabar Group)(p.215)
- • High percentage of women co-borrowers (90.38%) contributing to lower defaults and prompt repayment(p.212)
- • Established board committee structure with multiple oversight functions(p.257)
- • Comprehensive audit and internal control framework(p.258)
- • Rigorous financial oversight and compliance review processes(p.257)
- • Strong risk management governance with defined oversight(p.261)
- • Experienced and stable senior management team(p.266)
- • Diversified loan portfolio across property, gold, and personal loans(p.318)
- • Strong capital position with CRAR well above regulatory requirements(p.365)
- • Significant growth in loan portfolio year-over-year(p.318)
- • Secured lending model with tangible collateral(p.318)
- • Improved asset quality with low NPA ratios(p.370)
- • Director indemnification and insurance coverage(p.520)
- • Multiple revenue-generating product channels via retail lending(p.523)
- • Established regulatory registration with RBI(p.561)
- • Strong governance structure with independent board oversight(p.544)
Weaknesses
- • High concentration in self-employed customer base(p.31)
- • Recent loan portfolio with limited performance history(p.32)
- • Significant portion of new borrowers without formal credit history(p.32)
- • History of operational compliance failures(p.37)
- • Past instances of fraud in operations(p.40)
- • Negative asset-liability mismatch in medium-term buckets(p.41)
- • Outstanding statutory dues defaults(p.45)
- • Below-market equity issuances affecting existing shareholders(p.41)
- • Heavy dependence on co-origination partner ICICI Bank for significant portion of AUM and disbursements(p.47)
- • Promoters lack operational experience in running NBFC day-to-day operations and expanding branch networks(p.46)
- • Heavy reliance on internal credit policy and third-party data for credit decisions with potential for inaccuracy(p.46)
- • Significant unsecured loan portfolio with higher credit risk(p.52)
- • High employee attrition rate impacting operational continuity(p.55)
- • Geographic concentration with 69.98% of AUM from six states as of March 31, 2023(p.52)
- • Ambiguity regarding NBFC compliance with state money-lending laws creating regulatory uncertainty(p.46)
- • Potential conflicts of interest from directors' board positions at competing financial services companies(p.55)
- • Elevated leverage and capital intensity relative to asset base growth(p.207)
- • Modest profitability recovery after FY2022 dip in returns(p.207)
- • High cost-to-income ratio indicating operational efficiency challenges(p.207)
- • Borrowing cost pressures from recent RBI rate increases(p.207)
- • Compressed net interest margin reflecting sector-wide pressure(p.207)
- • Significant customer concentration with 34,738 borrowers in Secured MSME segment limits scale and diversification(p.218)
- • Debt-to-Tangible Equity ratio of 2.55x limits leverage capacity for growth funding(p.225)
- • Branch network concentration with 57.24% of branches operational for less than 36 months creates execution and maturity risks(p.221)
- • High dependence on co-origination partner ICICI Bank (21.24% of FY2023 Secured MSME disbursement) creates operational dependency(p.217)
- • Loans against Gold portfolio declining as percentage of AUM (25.21% FY2021 to 17.48% FY2023) indicates product maturity(p.214)
- • Significant reliance on bank borrowings for capital(p.287)
- • High leverage ratio indicating significant debt burden(p.287)
- • Rising credit costs and non-performing asset pressure(p.277)
- • Increasing operating expense burden(p.277)
- • Subsidiary company unable to meet RBI regulatory requirements(p.301)
- • High dependence on debt financing for operations(p.324)
- • Significant concentration in loan against property segment(p.318)
- • Material increase in impairment provisions(p.331)
- • Rising employee benefit costs(p.332)
- • Regulatory compliance delays in charge registrations(p.361)
- • Material litigation involving employees and customers with significant financial exposure(p.425)
- • Recurring defaults and delays in payment of statutory dues across multiple states and tax categories(p.427)
- • Systemic issues with branch-level fraud and employee misconduct resulting in significant customer losses(p.425)
- • Significant pending arbitration cases for non-payment of dues totaling over ₹1.8 billion(p.425)
- • Complex shareholder control structure with conflicting exit provisions(p.550)
- • Dependence on key individuals and their appointment/removal structure(p.545)
- • Restriction on shareholder transfers and capital raising limits(p.534)
- • Exposure to RBI lending covenant defaults(p.544)
Opportunities
- • Growing NBFC credit market with favorable demographics(p.25)
- • Rising economic recovery driving consumer demand(p.25)
- • Underbanked markets and credit-starved MSME segment(p.25)
- • Expansion of geographic footprint into semi-urban and rural markets with scope for faster growth(p.54)
- • Growth potential in Loans Against Gold segment given market concentration among top three players(p.48)
- • Massive credit gap in MSME segment estimated at ₹92 trillion(p.205)
- • Secured MSME loans (₹0.50-3.00m) projected to grow 18%-20% CAGR through FY2026(p.205)
- • Only 16.9 million of 70 million MSMEs registered on UDYAM, leaving vast untapped market(p.205)
- • Government initiatives and increasing digital data enabling credit assessment of underserved segments(p.205)
- • Rising financial literacy and mobile penetration in tier II/III cities driving credit growth(p.205)
- • Co-lending framework enabling capital optimization and risk distribution(p.162)
- • Leverage 27.68% average district-level penetration to expand deeper into underserved tier II/III markets(p.216)
- • Enter affordable housing finance market through SBFC Home Finance subsidiary with lower capital requirements for HFCs(p.216)
- • Expand product portfolio to capture growing NBFC housing credit market particularly in tier II/III cities(p.216)
- • Diversify and optimize funding sources to reduce average cost of borrowings (currently 8.22% in FY2023) and improve net margins(p.216)
- • Target customer segment in everyday/essential services is first to emerge from macro downturns providing counter-cyclical resilience(p.219)
- • Expand into adjacent geographies contiguously in existing states to leverage brand presence and achieve operating leverage(p.215)
- • Rapid loan portfolio growth trajectory(p.277)
- • Expansion of secured MSME lending business(p.283)
- • Geographic expansion across multiple states and regions(p.282)
- • Growing customer base and market penetration(p.282)
- • Improving profitability and return metrics(p.276)
- • Increased access to capital through co-origination partnerships(p.285)
- • Expansion of loan portfolio through securitization(p.359)
- • Growth in retail lending market for property and gold loans(p.339)
- • Diversification into new lending segments(p.319)
- • Digital infrastructure development through intangible assets(p.321)
- • Expansion of international funding options(p.353)
- • IPO listing path to unlock investor value(p.550)
- • Expansion through equity capital raising from shareholders(p.531)
- • Growth via acquisition and consolidation in retail lending(p.556)
- • Employee retention and incentive programs through ESOP(p.543)
Threats
- • High default risk from self-employed and MSME borrowers(p.31)
- • Rising competitive intensity from diversified players(p.39)
- • Regulatory changes and capital adequacy requirements(p.39)
- • RBI inspection and compliance risks(p.39)
- • Interest rate volatility affecting net interest margins(p.23)
- • Competitive intensity from larger financial institutions(p.39)
- • Intense competition from existing players and new entrants in NBFC lending sector(p.46)
- • Regulatory uncertainty regarding state money-lending laws and their application to NBFCs(p.46)
- • COVID-19 pandemic and similar outbreaks causing operational disruptions and credit deterioration(p.47)
- • Increasing standardization and competition in gold loan products reducing margins(p.48)
- • Customer balance transfer risk to competitors offering lower rates(p.52)
- • Cybersecurity and data breach risks with potential regulatory penalties and reputational damage(p.49)
- • Global economic slowdown and geopolitical instability affecting Indian markets and credit conditions(p.59)
- • Inflation and rising interest rates increasing operational costs(p.61)
- • Potential deterioration in receivables performance affecting securitization programs and credibility(p.50)
- • Regulatory shift to scale-based regulation creating higher capital and compliance burden(p.153)
- • Rising RBI provisioning norms for standard assets increasing credit costs(p.153)
- • Intensifying competition from banks gaining share in MSME and gold loan segments(p.190)
- • Economic cyclicality and credit quality stress from cost-push inflation affecting borrowers(p.161)
- • Funding cost pressures from RBI's accommodative stance reversal and higher repo rates(p.159)
- • Concentration risk in secured MSME loans given dependence on property-backed collateral(p.186)
- • Intense competition from larger MSME lenders including Vistaar Finance, Veritas Finance, AU Small Finance Bank and affordable housing finance companies(p.228)
- • Cyber-security risks including frauds, hacking, system failures and data breaches could expose company to operational losses(p.227)
- • Collateral-dependent lending model (96.44% of portfolio secured) exposes company to real estate market downturns and valuation losses(p.211)
- • Lease dependency for all 152 branch offices with typical 11-month to 9-year tenures creates operational and cost uncertainties(p.230)
- • Regulatory changes in NBFC capital adequacy, asset classification and lending norms could adversely impact profitability and operations(p.225)
- • Exposure to economic cycles and credit quality deterioration(p.303)
- • Interest rate and funding cost volatility(p.288)
- • Regulatory changes and compliance requirements(p.301)
- • Persistent asset quality challenges in restructured portfolio(p.283)
- • Competition from larger established financial institutions(p.287)
- • Rising interest rate environment impacting borrowing costs(p.331)
- • Regulatory changes in lending practices and NPA classification(p.360)
- • Credit risk from economic volatility affecting borrower repayment(p.318)
- • Concentration risk in real estate sector(p.367)
- • Potential policy changes affecting NBFCs(p.345)
- • Strict RBI regulatory compliance requirements on NBFC operations(p.529)
- • RBI regulatory approval dependency for equity transfers(p.539)
- • Mandatory compliance with systemically important NBFC guidelines(p.553)
- • Risk of key customer or lender relationship disruption(p.551)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| SBFC Holdings Pte. Ltd. | Promoter | 64.95% | 58.52% |
| Clermont Financial Pte. Ltd. | Promoter | 0% | 0% |
| Arpwood Partners Investment Advisors LLP | Promoter Selling Shareholder | 10.31% | 4.24% |
| Arpwood Capital Private Limited | Promoter Selling Shareholder | 2.53% | 1.04% |
| Eight45 Services LLP | Promoter Selling Shareholder | 1.04% | 0.22% |
| SBFC Holdings Pte. Ltd. | Promoter | 64.95% | 58.52% |
| Arpwood Partners Investment Advisors LLP | Promoter | 10.31% | 4.24% |
| Arpwood Capital Private Limited | Promoter | 2.53% | 1.04% |
| Eight45 Services LLP | Promoter | 1.04% | 0.22% |
| SBFC Holdings Pte. Ltd. | Promoter/Holding company | — | — |
| Arpwood Group | Promoter Group | — | — |
| Malabar Group | Promoter Group | — | — |
| SBFC Holdings Pte. Ltd. | Corporate Promoter | — | — |
| Clermont Financial Pte. Ltd. | Corporate Promoter | — | — |
| Arpwood Capital Private Limited | Corporate Promoter | — | — |
| Arpwood Partners Investment Advisors LLP | Corporate Promoter | — | — |
| Eight45 Services LLP | Corporate Promoter | — | — |
| SBFC Holdings Pte. Ltd | Holding Company/Promoter Group | 73.01% | 73.25% |
| Arpwood Partners Investment Advisors LLP | Promoter | 15.92% | 13.62% |
| Arpwood Capital Private Limited | Promoter Group | 3.91% | 3.34% |
| Eight 45 Services LLP | Promoter Group | 3.16% | 2.71% |
| SBFC Holdings Pte. Ltd. | Promoter | — | — |
| Arpwood Partners Investment Advisors LLP | Promoter | — | — |
| Arpwood Capital Private Limited | Promoter | — | — |
| Eight45 Services LLP | Promoter | — | — |
| Arpwood Partners Investment Advisors LLP | Promoter | — | — |
| Arpwood Capital Private Limited | Promoter | — | — |
| Eight45 Services LLP | Promoter | — | — |
| SBFC Holdings Pte. Ltd. | Promoter | — | — |
| Malabar India Fund Limited | Shareholder | — | — |
Leadership
Neeraj Swaroop · Chairperson
Aseem Dhru · Managing Director and Chief Executive Officer
Narayan Barasia · Chief Financial Officer
Jay Mistry · Company Secretary and Compliance Officer
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
SBFC Finance IPO FAQs
What is the lot size of SBFC Finance IPO?
The minimum lot size of SBFC Finance IPO is 260 shares. One lot costs ₹14,820 at the cut-off price.
When does SBFC Finance IPO open and close?
SBFC Finance IPO opened for subscription on 03 Aug 2023 and closed on 07 Aug 2023.
What is the listing date of SBFC Finance IPO?
SBFC Finance IPO listed on 16 Aug 2023.