Ujjivan IPO, a Perspective

Profile of the Bank

  • Ujjivan Small Finance Bank (USFB) is a small finance bank and it’s a subsidiary company of Ujjivan Financial Services Limited
  • The founder of the company is Samit Ghosh headquarters at Bangalore
  • Ujjivan Financial Services Limited started operations as a NBFC in 2005 and On 7 October 2015, Ujjivan received in-principle approval from the Reserve Bank of India to set up a small finance bank
  • Ujjivan Small Finance Bank Limited is a bank licensed under Section 22 (1) of the Banking Regulation Act, 1949 to carry out small finance bank business in India.
  • The bank commenced operations on 1 February 2017.
  • Ujjivan Small Finance Bank has become a Scheduled Bank in August 2017
  • In the month of Oct’2019 got approval from SEBI to issue IPO
  • By February 2018, Ujjivan was present across 24 states and union territories, 209 districts in India, catering to over 3.7 million customers and has been growing to 4.9 million customers as on 30th Sep2019
  • They provide products and services such as savings account, current account, fixed deposits (FD), recurring deposits (RD), Micro Loans, Home Loans & Small Business Loans.
  • The bank also offers internet banking, phone banking, mobile banking, biometric-enabled, thereby enabling customers to withdraw money through biometric authentication.
  • Customers can open their bank account in 5–7 minutes on a hand-held device through Aadhaar enabled KYC.
  • At present they are having 552 branches and planning for 574 new branches by March 2020
  • Nearly 16,776 employees are working at present
  • They focused on unserved and underserved segments and committed to building financial inclusion in the country
  • As on Sep’2019, the total loan is given amounting to ₹ 12,864 Crores out of which 79% of loan was given to small borrowers, Its clearly identifiable that they key focus is on small borrowers, and they are growing the micro banking segment at a moderate annual rate of 23% between FY 2017 and FY 2019
  • They plane to grow the microfinance business at 35%, affordable housing and MSME loans at 100% on a small base

The objective of Issue & Issue information

  • To comply with the licencing condition the bank has to list its share mandatorily, so they are going for Listing
  • The objective of the fresh issue would be utilised towards augmenting its Tier – 1 capital base to meet future requirements, and issue expenses
  • Decided to open Bid on 2nd Dec’19 and closes at 4th Dec’19, finalisation of basis of allotment 9th Dec’19
  • Price band at ₹ 36-37 per share, having a face value of ₹ 10
  • The issue price for existing shareholders of Holding company is a discount of ₹ 2 on the final issue price
  • Plan to raise ₹ 750 Crores through the fresh issue, out of which 10% (i.e ₹ 75 Crores) is reserved for existing holding company shareholders
  • The Issue size has been reduced, seems it already mobilized in the month of Nov’19 ₹ 250 Crores through Pre-IPO route, a private equity fund of Avendus Capital and Akash Bhanshali of Enam Group
  • Minimum order quantity 400 shares of 1 Lot and Maximum of 13 Lot of 5,200 shares
  • Investors portion of shareholding QIB 75%, NII 15% and RII 10% of Net Issue

Post listing requirement

  • At present Ujjivan Financial Services holding 95% of the stake, post issue of listing it will drop to 85%
  • Further, it has to reduce to 40% by Jan’2022, 30% by Jan2027 and 15% by Jan2032


  • It’s Gross Advances have grown from ₹ 586.10 crores as on 31st March 2017, to ₹ 10,55.24 crores as on 31st March 2019, and were as ₹ 12,864 crores as on 30th Sep 2019
  • Gross Advances stands at ₹ 12,864 Crores up 54.7% as compared with Sep’18
  • Its deposits have increased from ₹ 206.41 crores as on 31st March 2017, to ₹ 737.94 crores as on 31st March 2019, and were as ₹ 1012.98 crores as on 30th Sep 2019
  • Revenue has increased from ₹223.8 Crores as on 31st March 2017 to ₹ 1579.35 Crores as on 31st March 2018 to ₹ 2037.57 Crores as on 31st March 2019, and was as on 30th Sep 2019 its revenue is ₹ 1434.85 Crores
  • Its PAT has grown from ₹ 35 Lakhs as on 31st march 2017 to ₹ 6.88 Crores as on 31st March 2018 to ₹ 199.22 as on 31st March 2019 and was as ₹ 187.11 Crores as on 30th Sep 2019
  • EPS grew from 0.05 as on 31st March 2018 to 1.2 as on 31st March 2019
  • Net Worth has grown from ₹ 1646.93 as on 31st March 2018 to ₹ 1819.63 Crores as on 31st March 2019.


  • Comparable peer median value is considered AU Small Finance Bank, Equitas Holdings Ltd, and Bandhan Bank to arrive at the Ujjivan Small Finance Bank share price. The price to book value & PE ratio is taken as the multiplier. The Book value of Ujjivan Small Finance Bank is ₹ 1819.63 Crores and its EPS is ₹ 1.2 as on 31st March 2019, Median Price to book value 5.48 X and PE Ratio 61.60 X, based on the following assumption Market price per share is estimated as ₹ 73.92 and Price per share as per PE ratio is ₹ 69.25. The peer market value and PE ratio are taken as of December 2019 and EPS are taken as of 31st March’2019.
Particulars AU Small Finance Bank Equitas Holdings Ltd Bandhan Bank Median Ratios
Basic EPS (Rs.) 13.16 0.27 16.36  
Price To Book Value (X) 5.48 2.59 5.59 5.48
PE ratio (X) 61.60 379.07 35.36 61.60
Market Price Per Share 810.65 102.35 578.5  


Hence based on the above working Ujjivan Small Finance Bank share price is arrived.

Basis Value per share
Based on P/E Ratio 73.92
Based on P/BV 69.25


Considering the current market and expectation of performance from Ujjivan small finance Bank, It shows a lot of scope for price movement post this IPO. This will pay the way for more IPOs to leave money on the table to boost the investor’s interest in the capital market.

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