About Company

• Capital Small Finance Bank Limited ("Capital SFB”) was incorporated on May 31, 1999. Having no holding company, Capital SFB commenced operations as India’s first small finance bank in 2016 pursuant to RBI’s approval dated March 4, 2016. The bank offers a range of banking products on the asset and liability side, in all the states they operate in, i.e., Punjab, Haryana, Delhi, Rajasthan, Himachal Pradesh and Union Territory of Chandigarh. Their asset products primarily include agriculture loans, MSME and trading loans (working capital, machinery loans etc.) and mortgages (housing loans and loans against property).

• The bank focuses primarily on the middle-income customer segments with 41.62% of their branches in rural areas, 34.68% branches in semi-urban areas and 23.70% of their branches in urban areas as on September 30, 2023.

• As of September 30, 2023, they were present in 5 States and 1 Union Territory with 173 branches and 175 ATMs with 76.30% of their branches located in rural and semi-urban areas covering 24 districts and 75.75% of their total customers (both credit and deposit). The Bank has opened 126 branches since their conversion into an SFB taking the branch tally up to 173 branches.

• The bank generates fee income from products and services such as forex and money transfer, outward remittances, safe-deposit lockers, distribution of life insurance and general insurance products, 3-in-1 demat and trading account and other ancillary services. As on September 30, 2023 and March 31, 2023 respectively, 99.85% and 99.82% of their loan book was secured (with 84.26% and 85.16% of the loans secured by immovable properties).

• From Fiscal 2021 to 2023, the operating profit and profit after tax grew at a CAGR of 44.23% and 51.49%, respectively.

• They have average gross NPA ratio of 2.52% and average net NPA ratios of 1.30% with negligible write offs as a percentage of loan book for previous 3 Fiscals and first half of current fiscal year from Fiscal 2021 to 6 months period ended September 30, 2023.

• As on March 31, 2023 and September 30, 2023 they had CASA ratio of 41.88% and 37.76% respectively resulting in low cost of funds of 5.11% and 5.68% respectively. Their cost of funds stood at 5.68% and 5.11% for the 6 months ended September 30, 2023 and Fiscal ended March 31, 2023.

Strengths

Competitive Strength 

• Retail focused liability franchise with a high share of CASA;
• Secured and diversified advances portfolio;
• Streamlined credit assessment processes and risk management practices;
• Customer centric approach and understanding of target customers;
• Consistent track record of growth with constantly improving operational and profitability metrics;
• Professional and experienced leadership team

Business Strategies 

• Continue to grow the loan book organically with focus on secured lending;
• Strengthen the liability franchise;
• Leverage technology and data analytics for scalability and profitable growth;
• Focus on strengthening the operational and profitability metrics

Company Promoters

Company Financials

Capital Small Finance Bank Limited's revenue increased by 14.72% and profit after tax (PAT) rose by 49.59% between the financial year ending with March 31, 2023 and March 31, 2022.

Objects of the Issue

The Bank proposes to utilize the Net Proceeds from the Fresh Issue towards augmenting our Bank's Tier-I capital base to meet the Bank's future capital requirements. Further, the proceeds from the Fresh Issue will also be used towards meeting the expenses in relation to the Offer. The Bank expects to receive the benefits of listing the Equity Shares on the Stock Exchanges.