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Utkarsh Small Finance Bank Limited IPO Review

Utkarsh Small Finance Bank Limited, established in 2016, is a Small Finance Bank in India that experienced impressive growth in its Assets Under Management (AUM) during Fiscal 2019 and Fiscal 2022. It ranked as the second-fastest-growing SFB among those with AUM exceeding Rs. 50 billion during those years.

Utkarsh CoreInvest Limited, their main promoter, began its operations as a Non-Banking Financial Company (NBFC) in Fiscal 2010. It primarily aimed to offer microfinance services to segments that were previously overlooked or lacked access to financial services, with a particular focus on the states of Uttar Pradesh and Bihar. Utkarsh CoreInvest Limited, the entity behind their company, began its operations as a Non-Banking Financial Company (NBFC) in Fiscal 2010. Its primary focus was to offer microfinance services to segments of the population that had previously been neglected or had limited access to financial support. In particular, it concentrated its efforts in the states of Uttar Pradesh and Bihar, where there was a significant demand for such services among underserved communities.

Utkarsh Small Finance Bank Limited Products and Services

Utkarsh Small Finance Bank Limited’s product was Accounts, Cards, Term Deposits, Loans, Insurance & Investments, and remittances. As a Small Finance Bank (SFB) operating in India, they achieved the third highest rate of growth in their Gross Loan Portfolio between Fiscal 2019 and Fiscal 2023, among other SFBs with a Gross Loan Portfolio exceeding ₹60 billion. In order to reduce their reliance on microfinance operations and expand their secured loan portfolio, we have been diversifying their range of products to include non-micro banking loans. This strategic move enables us to broaden their offerings and explore new avenues for growth.

Their range of asset products comprises various types of loans: (i) micro banking loans, which include joint liability group loans and individual loans; (ii) retail loans, consisting of unsecured loans like business loans and personal loans, as well as secured loans such as loans against property (LAP); (iii) wholesale lending, offering both short-term and long-term loan facilities to SMEs, mid-sized and large corporations, and institutional clients; (iv) housing loans with a specific focus on affordable housing; (v) loans for commercial vehicles and construction equipment; and (vi) gold loans, introduced in Fiscal 2022.

Financial Overview

USFB is a prominent small finance bank that has consistently delivered satisfactory financial results, demonstrating a solid performance in the industry. Investors who are knowledgeable about the market may find it advantageous to allocate their funds for the medium to long term, taking into account future perspectives and potential opportunities.