ESAFBank expands capital base by Rs209cr

Shares issued at Rs40 per piece; New entrants include ICICI Lombard, Yussaffali 

THRISSUR: The Thrissur-headquartered ESAF Small Finance Bank (ESAFBank) has increased its capital base by Rs209 crore by September end, as the paid-up share capital was increased by 13.90 per cent or Rs52.2 crore – from Rs375.60 crore to Rs427.80 crore.

This, according to top management of the bank, will give ESAFBank the much needed headroom for growth. ESAFBank has already made big strides in terms of asset growth and improvement in profitability as the bank, the only small finance bank licensed from Kerala, has entered its second year of operations.

The bank issued about 5.22 crore shares with a face value of Rs10 each at a premium of Rs30 taking the issue price to Rs40 and the total amount thus raised to about Rs209 crore. With this, the capital base of ESAFBank may have crossed or come close to that of the 90-old-year Dhanlaxmi Bank.

While the new investors include MA Yussaffali and Esaf Swasray Multi-state Agricultural Coop Society with 4.99 per cent stake each, ICICI Lombard Private Ltd also has joined the list of leading financial institutions that already hold stakes in the bank such as PNB Metlife India Insurance Company Ltd, Bajaj Allianz Life Insurance Ltd, Muthoot Finance Ltd and PI Ventures LLP.

In fact, PNB Metlife has bought 25 lakh additional shares along with the new shareholders who entered the leading shareholders’ list on September 28, though its stake has not changed much due to the dilution of shareholding with the increase in share capital.

The new shakeup in the shareholding pattern necessitated by the increase in capital has also reduced the ownership of the largest (existing) shareholders in the bank.

The percentage of shares held by Esaf Microfinance and Investments Pvt Ltd, the largest shareholder by far, has dropped from 74.75 per cent to 65.62 per cent, whereas that of Kadamebelil Paul Thomas has contracted from  8.3 per cent to 7.29 per cent since September end.

The bank has chalked out ambitious growth plans and according to management, “The emphasis on customer acquisition and various initiatives in financial inclusion space it proposes for 2018-‘19, would place the bank as one among the top Small Finance Banks in the country.”

As of March 2018, (details since then are not available) ESAF had 104 retail branches, 297 Ultra Small branches in 93 districts across ten states in India viz. Chhattisgarh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, West Bengal, Maharashtra, Bihar, Tamil Nadu and Puducherry.




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