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Au Financiers gets Sebi’s approval to launch IPO

LiveMint logoLiveMint 27-03-2017 Sahib Sharma

Mumbai: Jaipur-based small finance bank licence holder Au Financiers gets Securities and Exchange Board of India, or Sebi’s approval to launch an initial public offer (IPO), according to two people aware of the development. The company will launch the IPO, which will be pure offer for sale in the next quarter.

According to draft red herring prospect (DRHP) as shown on Sebi’s website, existing shareholders of the company will sell 53.4 million shares through offer for sale.

The company has reduced its foreign holding recently to 49% after Kedaara Capital, ChyrsCapital Investment Advisors India Pvt Ltd, International Finance Corporation and Warburg Pincus partly exited the company, while Motilal Oswal Private Equity made a complete exit. ICICI Securities, HDFC Bank, Motilal Oswal Investment Advisors and Citibank are merchant bankers for the IPO.

Among small finance banks, it will be the third entity that will be listed. Equitas Small Finance Bank got listed in April 2016 and next month Ujjivan Small Finance Bank got listed too. Both Ujjivan and Equitas were operating as microfinance entities at the time of getting listed.

Au Financiers is the only non-banking finance company (NBFC) among the 10 entities to receive in-principle approvals to start small finance banks. In December it received the final licence to start small finance bank operations. Au Financiers is likely to start its banking operations by the middle of April.

In February 2016, Au Financiers had sold its mortgage business to strengthen its capital base.

Au Financiers currently has 300 branches spread across 11 cities, and proposes to increase them to 400 by March 2018. Going forward, the upcoming small finance bank will continue to focus on small and medium enterprise and vehicle loan segment, as reported by Mint in September.

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