Ujjivan Financial's Rs 1,500 crore IPO to hit D-Street soon

MUMBAI: Ujjivan Financial will be the first micro lender in six years to plan a public share offering, as it hopes to raise about `1,500 crore, but the valuations could hardly match what SKS Micro got when this sector was at its red-hot best. Ujjivan Financial has received the licence for a small bank and is planning an IPO to raise `1,500 crore in order to meet Reserve Bank of India’s shareholding norms.

At present, about 90% of the company is owned by foreign investors. It has given the mandate to Axis Capital and IIFL for the IPO. The non-bank finance MFI is backed by major investors, including Elevar Equity, Women’s World Banking Capital Partners, Lok Capital, IFC, CX Partners, NewQuest, CDC, FMO, Wolfensohn Fund Management, L.P., Bajaj Holdings and Sequoia Capital. Ujjivan could not be reached for comments. “There’s a decent demand from investors as small finance banks are niche companies that have presence in rural India,” said an investment banker, who did not wish to be identified.

Ujjivan Financial Services was founded in 2005 as an MFI with an objective of providing financial services to the urban poor. Small bank licence recipients, including Equitas and AU Financiers, are also in the process of tapping the capital market. According to RBI stipulations, MFIs should have a minimum paid-up capital of `100 crore.