Established in the month of July in the year 2006, Jana Small Finance Bank Limited is a non-banking financial institution primarily dedicated to extending its services in the realm of MSME loans, affordable housing loans, term loans to NBFC, loans against fixed deposits, two-wheeler loans, and gold loans.
Jana SFB presents a diverse array of unsecured loan products, encompassing individual and micro business loans, agricultural and allied loans, and group loans.
The bank categorizes its loans into three distinct classifications:
(i) Individual loans tailored for home improvement/repair,
(ii) Individual loans designated for school fees
(iii) Individual personal loans, catering to purposes such as debt consolidation, family functions, incidental expenses, and business requirements.
The institution delivers digital products, services, and platforms, including mobile and internet banking, catering to both retail and corporate clienteles. Over the period between March 31, 2021, and March 31, 2023, the bank witnessed a substantial growth in its gross secured advances, escalating from ₹50,760.00 million to ₹99,047.54 million, indicating a notable compound annual growth rate (CAGR) of 39.69%.
As of March 31, 2023, Jana SFB boasts a network of 754 banking outlets scattered across 22 states and two union territories, with 272 strategically positioned in unbanked rural centers. This widespread presence across the nation serves as a strategic measure to mitigate concentration risks.
Having rendered services to nearly 12 million customers since its inception in 2008, Jana SFB currently maintains an active customer base of 4.57 million as of March 31, 2023. In the last three fiscal years, the bank has successfully attracted 0.91 million, 0.51 million, and 0.08 million new customers, respectively.
As of March 31, 2023, Jana SFB can proudly claim a workforce comprising a total of 18,184 permanent employees.
OBJECTIVE
- Augmenting Tier 1 Capital Base
- Meeting Offer Expenses
- Brand Visibility and Benefits of Listing
- Growth and Expansion
- Benefits for Existing Shareholders
POSITIVE
- Growing SFB sector with rising demand for financial services in underserved segments
- Attractive valuation compared to some peers
- Proven track record of profitability and good asset quality
NEGATIVE
- Limited operating history compared to established banks
- Dependence on microfinance, making it vulnerable to economic downturns
- Intense competition in the banking sector
Jana Small Finance Bank IPO Timeline
- Open Date: February 7, 2024
- Close Date: February 9, 2024
- Issue Size: ₹570 Crore
- Issue Price: ₹393 – ₹414 per share
- Minimum Investment: ₹14,148 (36 shares)
- Listing: BSE & NSE (tentative listing date: February 14, 2024)
Offer:
- Fresh Issue: ₹462 Crore
- Offer for Sale: ₹108 Crore
Jana Small Finance Bank IPO Details
| IPO Open Date: | February 7, 2024 |
| IPO Close Date: | February 9, 2024 |
| Basis of Allotment: | February 12, 2024 |
| Refunds: | February 13, 2024 |
| Credit to Demat Account: | February 13, 2024 |
| IPO Listing Date: | February 14, 2024 |
So, how does Jana Small Finance Bank IPO Fare in Terms of Financials?
Financial Details
- Jana Small Finance Bank’s financial performance has been positive over the past three years, with revenue, expenses, and PAT all increasing. The bank has also been improving its profitability ratios, indicating better cost management and operational efficiency.
FINANCIAL REVIEW
| Year | Revenue | Expense | PAT |
| 2021 | ₹2720.74 | ₹2648.48 | ₹72.26 |
| 2022 | ₹3062.37 | ₹3044.89 | ₹17.47 |
| 2023 | ₹3699.88 | ₹3443.90 | ₹255.97 |
| Sep 2023 | ₹2215.57 | ₹2002.35 | ₹213.22 |
Positive Aspects:
- Revenue growth: Revenue increased by 20.82% from FY22 to FY23, indicating positive growth momentum.
- Profitability: Profit after tax saw a significant surge of 1365.12% during the same period, suggesting efficient operations and good profit generation.
- Attractive valuation: The IPO price band appears competitive compared to some listed peers, with a P/E ratio based on post-IPO NAV of 10.15.
Jana Small Finance Bank IPO Valuation
| Earning Per Share (EPS): | ₹47.47 per Equity Share |
| Price/Earning P/E Ratio: | N/A |
| Return on Net Worth (RoNW): | 14.40% |
| Net Asset Value (NAV): | ₹346.42 per Equity Share |
Jana Small Finance Bank IPO – SWOT Analysis
Strengths
- Strong Growth Potential: The SFB sector is experiencing rapid growth, and Jana SFB is well-positioned to capitalize on this trend with its focus on underserved rural and semi-urban markets.
- Proven Track Record: The bank has a good track record of profitability and asset quality, with revenue growing 20.82% and PAT surging 1365.12% from FY22 to FY23.
- Attractive Valuation: The IPO price band seems competitive compared to some listed peers, with a P/E ratio based on post-IPO NAV of 10.15.
- Experienced Management Team: The management team has a strong track record in the microfinance sector and a deep understanding of the target market.
- Digital Adoption: The bank is investing in digital technologies to improve efficiency and reach a wider customer base.
Weaknesses
- Limited Operating History: Compared to established banks, Jana SFB has a shorter operating history, making future performance less predictable.
- Reliance on Microfinance: The bank’s heavy dependence on microfinance makes it vulnerable to economic downturns and rural sector issues.
- Intense Competition: The banking sector, especially in microfinance, is fiercely competitive, posing challenges for market share and profitability.
- Regulatory Uncertainty: Changes in SFB regulations could adversely affect Jana SFB’s operations and profitability.
Opportunities
- Growing SFB Market: The SFB sector is expected to continue growing, driven by government initiatives and rising demand for financial services in underserved segments.
- Product Diversification: Expanding beyond microfinance to offer diversified financial products can mitigate risk and attract new customer segments.
- Strategic Partnerships: Collaborations with established players or fintech companies can accelerate growth and offer competitive advantages.
- Technological Advancements: Leveraging technology for wider reach, improved efficiency, and new product offerings can further enhance growth.
Threats
- Economic Downturn: A slowdown in the economy could negatively impact loan repayments and asset quality, affecting Jana SFB’s financial stability.
- Rising Interest Rates: Higher interest rates could increase borrowing costs for the bank, impacting margins and profitability.
- Technological Disruption: New technologies and fintech players could disrupt the traditional banking landscape, posing challenges for established players like Jana SFB.
- Regulatory Scrutiny: Increased regulatory scrutiny on SFBs could lead to stricter compliance requirements and higher costs
COMPETITIVE ANALYSIS: MARKET PEERS
Here are some of the key market peers of Jana Small Finance Bank IPO:
Peer Group:
- Ujjivan Small Finance Bank (USFB): Established player with a larger branch network and wider product portfolio.
- Equitas Small Finance Bank (ESFB): Known for its strong technology adoption and focus on urban markets.
- Au Small Finance Bank (AUFB): Largest SFB in terms of assets, strong brand recognition, and diversified product offerings.
- Suryoday Small Finance Bank (SSFB): Smaller player with a focus on rural and semi-urban markets, similar to Jana SFB.
Comparison Matrix:
| Metric | Jana SFB | USFB | ESFB | AUFB | SSFB |
|---|---|---|---|---|---|
| Founded | 2009 | 2006 | 2007 | 2010 | 2010 |
| Branches | 1,000+ | 1,600+ | 867 | 3,300+ | 585 |
| Deposits (Cr) | 6,561 | 24,110 | 19,855 | 75,172 | 10,584 |
| Advances (Cr) | 5,507 | 20,938 | 20,513 | 58,547 | 8,902 |
| Net Profit (Cr) | 94 | 817 | 504 | 2,200 | 172 |
| P/E Ratio (TTM) | – | 26.06 | 37.42 | 38.21 | 29.36 |
| Focus | Rural & Semi-urban, Microfinance | Rural & Semi-urban, Diversified | Urban & Semi-urban, Technology | Diversified | Rural & Semi-urban |
Competitive Advantages:
- Jana SFB: Lower P/E ratio compared to some peers, strong presence in underbanked segments, microfinance expertise.
- USFB: Larger network, wider product range, established brand.
- ESFB: Strong technology adoption, focus on urban markets with higher growth potential.
- AUFB: Largest asset base, diversified product offerings, strong brand recognition.
- SSFB: Similar focus on rural markets as Jana SFB, potentially lower competition.
Competitive Disadvantages:
- Jana SFB: Smaller network, limited product portfolio compared to larger peers, higher dependence on microfinance.
- USFB: Higher valuation compared to Jana SFB.
- ESFB: Smaller network compared to USFB and AUFB, limited presence in rural markets.
- AUFB: Higher competition in broader financial services market.
- SSFB: Smaller size and resource base compared to other peers.
Jana Small Finance Bank IPO GMP
- Grey market premium as on 08-02-2024= Rs 50 /Share
Disclaimer:
- IPO Grey Market Premium (Jana Small Finance Bank IPO GMP) mention is valid for the specific date as mentioned in the header.
- We are not buying and selling IPO forms on IPO Grey Market.
- Do not subscribe for IPO by just seeing premium Price as it may change anytime before listing. Subscribe only considering Fundamentals of the companies.
Jana Small Finance Bank IPO
🔴 Live Subscription Status 🔴
09/02/2024 3:00 PM
| No. Shared Offered | Day 1 | Day 2 | Day 3 | |
| Qualified Institutional Buyers(QIBs) | 27,62,350 | 0.14 | 0.19 | 38.75 |
| Non Institutional Investors | 21,03,127 | 1.22 | 3.05 | 24.83 |
| Retail Individual Investors(RIIs) | 49,07,296 | 1.19 | 2.31 | 5.13 |
| Employees | 3,43,511 | 0.31 | 0.83 | 1.84 |
| Total | 1,01,16,284 | 0.88 | 1.83 | 18.30 |
FINAL TAKEAWAY
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