The proceeds from the fresh issuance worth Rs 750 crores will be used towards augmentation of its capital base to meet future capital requirements arising out of the growth of its business and assets.

The public issue consists of a fresh issue of equity shares worth up to Rs 750 crore and an offer-for-sale (OFS) of up to Rs 850 crore by Promoter and selling shareholders.

Mumbai-based SBFC Finance Private Limited a non-deposit-taking non-banking finance company (“NBFC-ND-SI”) offering Secured MSME Loans and Loans against Gold, to entrepreneurs, small business owners, self-employed individuals, salaried and working-class individuals has filed its draft red herring prospectus with the capital markets regulator Securities and Exchange Board of India to raise Rs 1600 crore via initial public offering (IPO).

The public issue consists of a fresh issue of equity shares worth up to Rs 750 crore and an offer-for-sale (OFS) of up to Rs 850 crore by Promoter and selling shareholders, which comprises up to Rs 398.19 crore by Arpwood Partners Investment Advisors LLP, Rs 97.73 crore by Arpwood Capital Private Limited, Rs 79.08 crore by Eight45 Services LLP, and Rs 275 crore by SBFC Holdings Pte. Ltd. The offer also includes a reservation for subscription by eligible employees.

The Offer is being made through the Book Building Process, wherein not more than 50% of the Offer shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Offer shall be available for allocation to Retail Individual Bidders.

The company in consultation with merchant bankers on the issue may consider a private placement, aggregating up to Rs. 150 crores. If such placement is completed, the fresh issue size will be reduced.

The proceeds from the fresh issuance worth Rs 750 crores will be used towards augmentation of its capital base to meet future capital requirements arising out of the growth of its business and assets.

SBFC Finance Limited has one of the highest assets under management ("AUM") growth rates among India's MSME-focused NBFCs, with a CAGR of 40% between Fiscal 2019 and Fiscal 2022 and along with strong disbursement growth, between Fiscal 2019 and Fiscal 2022, with a CAGR of 39%, as a result, it focuses on disbursing loans with a ticket size in the range of Rs 0.50 million to Rs 3.00 million and as of June 30, 2022, 84.73% of its AUM had ticket sizes in this range.

The Mumbai Headquartered, non-banking finance company is backed by marquee institutional investors such as the Clermont Group, Arpwood Group, and Malabar Group.

ICICI Securities Limited, Axis Capital Limited, and Kotak Mahindra Capital Company Limited are the book-running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE.