Jana Small Finance Bank Limited is the fourth largest Small Finance Bank in terms of AUM and the fourth largest Small Finance Bank in terms of deposit size as at September 30, 2023. As at September 30, 2023, they had 771 banking outlets, including 278 banking outlets in unbanked rural centres, in 22 states and two union territories. They have served nearly 12 million customers since 2008, including 4.87 million active customers as at September 30, 2023. The primary secured loan products are secured business loans, micro loans against property ('Micro LAP'), MSME loans, affordable housing loans, term loans to NBFC, loans against fixed deposits, two-wheeler loans and gold loans. The primary unsecured loan products are individual and micro business loans, agricultural and allied loans, and group loans (group loans are offered to a group of women as per the Joint Liability Group ('JLG') model). The gross advances has increased from Rs 118,389.82 million as at March 31, 2021 to Rs 180,007.41 million as at March 31, 2023, representing a CAGR of 23.31%, and further increased to Rs 213,471.30 million as at September 30, 2023, an increase of 18.59%. The gross secured advances has increased from Rs 50,760.00 million as at March 31, 2021 to Rs 99,047.54 million as at March 31, 2023, representing a CAGR of 39.69%, and further increased to Rs 122,577.38 million as at September 30, 2023, an increase of 23.76%, and the gross advances of agricultural and allied loans has increased from Rs 15,510.70 million as at March 31, 2021 to Rs 30,944.43 million as at March 31, 2023, representing a CAGR of 41.25% and further increased to Rs 36,141.39 million as at September 30, 2023, an increase of 16.79%. The secured gross advances as a percentage of total gross advances has increased from 42.87% as at March 31, 2021 to 57.42% as at September 30, 2023. The agricultural and allied loans as a percentage of the gross advances has increased from 13.10% as at March 31, 2021 to 16.93% as at September 30, 2023. The deposits have increased from Rs 123,162.58 million as at March 31, 2021 to Rs 163,340.16 million as at March 31, 2023, representing a CAGR of 15.16%, and further increased to Rs 189,367.24 million as at September 30, 2023, an increase of 15.93%. For the periods FY21, FY22, FY23 and upto Q2 FY24, the gross NPA of Bank was 7.25%, 5.71%, 3.94% and 2.44% respectively and the net NPA was 5.33%, 3.95%, 2.64% and 0.87% respectively. So asset quality is improving steadily. In addition to the above, the Bank, in consultation with the BRLMs, undertook (i) a pre-IPO placement of 12,154,044 CCPS (which were subsequently converted into 401,149 Equity Shares) at an issue price of Rs 10 each, aggregating to Rs 121.54 million, and (ii) a pre-IPO placement of 2,439,607 Equity Shares at an issue price of Rs 414 each (including a premium of Rs 404 per Equity Share) aggregating to Rs 1,009.99 million. The size of the Fresh Issue has been adjusted to Rs 4,620.00 million. As per financial performance, Jana Small Finance Bank Limited has posted total income / net profits of Rs 2,720.74 Cr / Rs 72.26 Cr (FY21), Rs 3,062.37 Cr / Rs 17.47 Cr (FY22), Rs 3,699.88 Cr / Rs 255.97 Cr (FY23) and Rs 2,215.57 Cr / Rs 213.22 Cr (Q2 FY24). So as per previous financials data, company has shown good growth. Also asset quality is improving. Company has an average EPS of Rs 24.63 and average RoNW of 8.78% for last three fiscals. Issue is priced at a P/BV of 1.20 as per NAV of 346.42 as on 30.09.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 247.84, 16.92, 10.47 and 10.15 respectively, which looks reasonably priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 130 IPOs in last three fiscals. Axis Capital Limited : This is 52nd Main Board IPO from this BRLM. From last 10 Main Board IPOs, two opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price.( As on 02.02.2024 ) ICICI Securities Limited : This is 58th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, four are trading below issue price and remaining are trading above issue price.( As on 02.02.2024 ) SBI Capital Markets Limited : This is 23rd Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price.( As on 02.02.2024 ) As per financials, Jana Small Finance Bank Limited has shown good growth, RoNW is 14.40% and P/E is respectively 247.84, 16.92, 10.47 and 10.15 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks reasonably priced. Company is a Small Finance Bank. There is good growth opportunity as rural market under penetrated and performance of BRLM is good. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
✍️ Post a Comment