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  • Writer's pictureJatin Agarwal

Utkarsh Small Finance Bank IPO

Utkarsh Small FInance Bank Logo

Company and IPO Overview:

After receiving approval from the RBI to establish a small finance bank (SFB), Utkarsh Core Invest Limited incorporated Utkarsh Small Finance Bank Limited as a wholly-owned subsidiary on April 30, 2016. Utkarsh Small Finance Bank recorded the second fastest AUM growth in the years Fiscal 2019 and Fiscal 2022 among SFBs with AUM of more than Rs. 50 billion.

As of FY23, the bank had 830 Banking Outlets spread over 26 States and Union Territories in India, encompassing 253 districts.

The following are the product offerings of the company:

1. Microbanking loans that include individual loans and joint liability group loans.

2. Retail loans include unsecured loans, such as personal loans and business, and secured loans like loans against property.

3. Wholesale lending that includes long-term and short-term loan facilities to SMEs, medium and large corporates and institutional clients.

4. Housing loans which focus on affordable housing.

5. Commercial construction/vehicle equipment loans.

6. Gold loans.

Customers of Utkarsh Small Finance Bank Limited can avail of features like Top-up/Balance Transfer facility, Hassle-free processing with Easy Documentation Process, Avail loan up to Rs. 50 crores and Tenure up to 30 years, and efficient eligibility for salaried and self-employed individuals.

The operations of the entity are spread across India and are present in 22 States and 4 Union Territories with 830 Banking Outlets and 15,400 employees, as of 31 March 2023. As of 31 March 2023, 27.35% of the Banking Outlets were located in Unbanked Rural Centres as against the regulatory requirement of 25% of banking outlets of SFBs to be located in URCs.

Operations of Utkarsh Small Finance Bank Limited are focused in rural and semi-urban areas and as of 31 March 2023, the company had 3.5 million customers (both deposit and credit) majorly located in rural and semi-urban areas primarily in the states of Bihar, Uttar Pradesh, and Jharkhand that have the best asset quality among other states but with low and moderate credit penetration.

Utkarsh Small Finance Bank Limited IPO is the next main board IPO after Senco Gold IPO and the company is about to raise around ₹ 500 crores via IPO comprising fresh issue only. The price band of the issue is ₹ 23 to ₹ 25 with a minimum market lot of 600 shares. The retail quota is 10.00%, NII is 15.00% and QIB is 75%.

Financials (rounded off):


Total Revenue (₹ in cr)

​​​PAT (₹ in cr)










Objectives of the Issue:

1. To increase its Tier–1 capital base in order to meet its future capital requirements.

2. To meet the expenses incurred in relation to the Issue.

IPO Details:

IPO Date


Face Value

₹10 per share

IPO Price Band

₹23-₹25 per share

IPO Lot Size


Listing at


Basis of Allotment


Credit of Shares in Demat


Listing Date


Pre-Issue Shareholding


Post-Issue Shareholding


Retail Minimum Lot Size

600 shares (₹15,000)

Valuations & Margins:


FY 21

FY 22

FY 23









CASA (%)








Important things to note about the Company:

Top reasons to consider the IPO:

1. The business has a history of providing microfinance services to clients, with a focus on financial inclusion for under-served and unserved clientele in rural and semi-urban areas.

After the commencement of SFB operations, it further improved its relationship with borrowers by concentrating on microfinance and expanding its product line to include bank accounts, deposit products and other loan products.

2. Utkarsh Small Finance Bank offers a wide range of deposit products that include salary accounts, savings accounts, current accounts, recurring & fixed deposits and locker facilities. It also offers diversified liabilities products at competitive rates targeted primarily at retail customers from all segments led by middle-class individuals, senior citizens, and self-employed and salaried individuals.

This has enabled its total deposits and CASA ratios to increase over the past three years.

3. As of FY23, the bank had 830 Banking Outlets spread over 26 States and Union Territories in India, encompassing 253 districts, with 522 of them being in rural and semi-urban areas. This range of banking outlets will let the bank in providing service to existing customers as well enabling them to attract new customers.

4. One of the main strengths of Utkarsh Small Finance Bank is its capacity to deliver products and services at a reasonable cost, and its cost-to-income ratio was the lowest among SFBs with a Gross Loan Portfolio of more than 60 billion in Fiscal 2023.

5. The promoter of Utkarsh Small Finance Bank has a number of institutional investors, some of which include including British International Investment PLC, RBL Bank Limited, HDFC Life Insurance Company Limited, and HDFC Ergo General Insurance Company Limited. The bank believes it will help in increasing its credibility.

Risk factors to watch out in the IPO:

1. Utkarsh Small Finance Bank is subject to inspections by regulatory authorities like SEBI. Noncompliance with RBI inspections/observations or other regulatory requirements, as well as any negative observations from such regulators, may have a material adverse effect on our business, financial condition, operating performance, or cash flows.

2. A huge portion of the bank advances (such as loans) in the micro banking segment are towards customers located in the states of Uttar Pradesh and Bihar. Any adverse changes in the region’s conditions can have a negative impact on the company’s business, financial condition, results of operations, and cash flows.

3. While the company’s revenues have increased over the span of 3 years, its profits after tax haven’t been able to maintain the same consistent pace. Furthermore, the company has no assurance about maintaining its profitability in the future.

4. The banks operation include handling significant amounts of cash which makes it exposed to susceptible to operational risks, including fraud, petty theft and embezzlement.

5. If the bank incurs any huge losses that exceed the insurance coverage, it could have an adverse impact on the business.

Crisp Insights:

  • Utkarsh Small Finance Bank IPO GMP Today: The Company is commanding a strong GMP of around ₹11- ₹14.

  • Utkarsh Small Finance Bank IPO Review: Apply for listing gains.

Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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Soumya Naskar
Soumya Naskar
Jul 12, 2023


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