SK Finance IPO: Vehicle finance firm files DRHP with SEBI to raise ₹2,200 crore
Upstox
2 min read • Updated: May 3, 2024, 3:44 PM
Summary
SK Finance IPO: The ₹2,200-crore proposed offer of the vehicle finance company is a mix of fresh issue of shares worth ₹500 crore and an offer for sale (OFS) component of ₹1700 crore
SK Finance IPO: Firming up its listing plans, vehicle financier SK Finance has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to launch its initial public offering (IPO), as per the documents filed with the market regulator on May 3.
The company is targeting to raise ₹2,200 crore via the proposed offer, that includes a mix of fresh issue of shares worth ₹500 crore and an offer for sale (OFS) component of ₹1,700 crore.
In the OFS, existing investors Norwest Venture Partners X-Mauritius, TPG Growth IV SF PTE Ltd, Evolvence Coinvest I, Evolvence India Fund III, Rajendra Kumar Setia, Rajendra Kumar Setia HUF will offload their stakes.
SK Finance intends to use the funds generated from the fresh issue to increase its capital base and meet future business requirements for lending and general corporate purposes.
The book-running lead managers for the issue are Jefferies India Private Limited, Kotak Mahindra Capital Company Limited, Nomura Financial Advisory and Securities (India) and Motilal Oswal Investment Advisors Limited.
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About SK Finance
Founded in 1994, SK Finance's services include vehicle financing and financing for Micro, Small and Medium Enterprises (MSMEs). The company is spread across 11 states and one union territory with a total of 535 branches as of December 31, 2023.
The company is registered with the Reserve Bank of India (RBI) as a non-deposit-taking, non-banking finance company middle layer (NBFC ML). It offers funding for used and new commercial vehicles, two-wheelers, tractors and business loans.
According to a report by Crisil, the overall vehicle financing segment in India was valued at approximately ₹11.85 lakh crore as of financial year 2022-23 (FY23), representing a Compound Annual Growth Rate (CAGR) of around 11% from FY19. In the future, it is expected that the outstanding credit will continue to grow at a CAGR of 16%-18% from FY23 to FY27, reaching ₹21 lakh crore.
Earlier this year, SK Finance had raised ₹1,328 crore from investors, including ₹415 crore from Motilal Oswal Private Equity.