Au Small Finance Bank Ipo Note

Au small finance bank ipo note

AU Small Finance Bank is an Indian scheduled [2]commercial bank that was founded as vehicle finance company AU Financiers (India) Ltd in 1996 and converted to a small finance bank on 19 April 2017.[3]

AU Small Finance Bank has a long-standing track record of over two decades of being a retail-focused and customer-centric institution; serving low and middle income individuals and micro / small businesses that have limited or no access to formal banking and finance channels.

AU Small Finance Bank

The Bank offers a comprehensive suite of loan, deposit & payment products and services.[4]

AU Small Finance Bank ranked 479 in the list of Fortune India 500 (2018) companies, with annual revenue of ₹ 2,155.25 crores (US$ million) and Total B/S Assets of Rs. 27,812 Cr (US$4.038 billion).[5] Its full market capitalization at FY18 was ₹17,655 crores (US$2.71 billion).

AU Bank had Gross Asset Under Management of Rs. 21,765 Cr, Total Deposits of Rs. 14,686 Cr, Net Worth of Rs.

Au small finance bank ipo note

3,035 Cr and Gross NPA and Net NPA of 2.1% and 1.3% respectively as of December 31, 2018. The Bank is adequately capitalized with Total CRAR of 19.0% and Tier-I CRAR of 15.5%. [6] AU Bank enjoys long term credit rating of “AA-/Stable” from CRISIL Ratings[7], ICRA Ratings[8], India Ratings[9] & CARE Ratings[10].


The company was founded by Mr. Sanjay Agarwal (managing director and CEO of AU Small Finance Bank) as a private limited company, and publicly listed in an IPO on 29 June 2017.[3] A merit holder Chartered Accountant and a first generation entrepreneur, he holds ~31% stake in the Bank.

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He is supported by a team of 12,572 employees.

AU Small Finance Bank is listed on NSE & BSE with market capitalization of ~Rs. 17,000 crore. [11] On its first day of trading, the stock rose 51% to be the most expensive bank in India based on price-to-book.[12] Over the years, the Bank has attracted marquee investors like IFC, Warburg Pincus, Temasek Holdings, Nomura, SBI MF, Kotak Mahindra MF, etc.

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[13]Private equity companies that provided venture capital, including Warburg Pincus and International Finance Corporation, made partial exits for as much as nine times their original investment.[14][15]

In November 2017, the Reserve Bank of India added the bank to its schedule of commercial banks, further improving the bank's growth prospects by reducing the cost of short-term funds and improving the bank's ability to provide services.[16]


Due to its history as a vehicle finance company, as of March 2018 almost all the loans made by AU Small Finance Bank were secured, unlike most small finance banks that have unsecured loans due to their background in microfinance.

This provides lower yields (lower interest rates) than unsecured loans, so the bank has been particularly active in growing its deposits, as bank deposits have lower cost than other sources of funds.

Au small finance bank ipo note

It has also sought to diversify into savings products like deposits, payment / transaction banking, distribution of third party products, and additional loan products thereby positioning itself as a holistic financial products and services provider. [17]


As on December 31, 2018, AU Small Finance Bank’s distribution network comprises 396 branches, 84 asset centres, 49 business correspondents, 15 offices and 485 ATMs spread contiguously across 11 states in North, West & Central India with over 1.1 million customers.


The bank has operations in 11 states and one union territory, with Rajasthan, Gujarat, Maharashtra and Madhya Pradesh being key states.

Au Financiers IPO Review - Au Small Finance Bank Limited IPO Review

[19] It is one of the largest banks by number of locations in its home state of Rajasthan.[20]


  1. ^"AU Small Finance Bank Q4 net up 7 pc at Rs 83 cr".

    The Times of India.

    AU Small Finance Bank Ltd.

    PTI. 26 April 2018. Retrieved 27 April 2018.

  2. ^"AU Bank Investor Presentation Q3FY19"(PDF).
  3. ^ abMudgill, Amit (28 June 2017).

    Au small finance bank ipo note

    "AU Small Finance Bank IPO; here's what 8 brokerages say". The Economic Times. Retrieved 15 March 2018.

  4. ^"AU Bank Investor Presentation Q3FY19"(PDF).
  5. ^"AU Small Finance Bank - Fortune 500 List 2018 - Fortune India".

    Put option trading market Retrieved 28 March 2019.

  6. ^"AU Bank Investor Presentation Q3FY19"(PDF).
  7. ^"Company Factsheet".

    Au small finance bank ipo note

    CRISIL. Retrieved 28 March 2019.

  8. ^"ICRA Report".
  9. ^Ratings), India Ratings and Research Private Limited(India.

    "India Ratings and Research Private Limited : India's Most Respected Credit Rating and Research Agency". Retrieved 28 March 2019.

  10. ^"Care Ratings for AU Bank"(PDF).
  11. ^"The First Years of the World Bank (1946–62)", The World Bank, Pluto Press, 2015, pp. 17–29, doi:10.2307/j.ctt18fsbxs.9, ISBN 
  12. ^Babla, Shraddha (11 July 2017).

    Au Small Finance Bank Ltd.

    "After 51% Listing Gains, AU Small Finance Bank India's Most Expensive". Bloomberg Quint. Retrieved 15 March 2018.

  13. ^"AU Bank Investor Presentation Q3FY19"(PDF).
  14. ^Chatterjee, Paramita (7 December 2017). "PE Exits At An All-time High". BW Businessworld.


    Retrieved 28 March 2018.

  15. ^"High Stakes". Outlook Business. 2 March 2018. Retrieved 28 March 2018.
  16. ^Srivats, K.R. (2 November 2017). "AU Small Finance gets scheduled commercial bank status". The Hindu Business Line. Retrieved 15 March 2018.
  17. ^"AU Bank Investor Presentation Q3FY19"(PDF).
  18. ^"AU Bank Investor Presentation Q3FY19"(PDF).
  19. ^"Rating Rationale: AU Small Finance Bank Limited".


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    6 December 2017. Retrieved 17 March 2018.

  20. ^"India Ratings Upgrades AU Small Finance Bank's NCDs to 'IND AA-'/Stable".

    India Ratings and Research Private Limited. 23 February 2018. Retrieved 17 March 2018.