IBL Finance Limited’s Rs. 33.41 crore IPO opens

Incorporated in August 2017, IBL Finance Limited is a fintech-based financial services platform that uses technology and data science to make lending easier and faster. IBL Finance is a mobile app that offers instant personal loans up to Rs. 50,000 through a completely digital process. Loans can be approved in as fast as under three minutes.

The company has revolutionized the lending process. Its digital platform addresses challenges such as geographical presence and extensive documentation processes. Customers can apply for a loan with a simple process on IBL Finance’s application and get disbursals within minutes. As of March 31, 2023, the company has disbursed Rs. 71.05 crore as loans to 1,63,282 individuals. In 2023, there were 3,81,156 logins in IBL’s instant personal loan application. On average 27,969 users were active on the application each month.

The company’s advanced underwriting algorithms use data from many sources to generate a credit report with over 500 data points. Simple and concise language ensures customers can easily understand the information the company provides. The company had seven branches in Gujarat and Maharashtra as of August 2023.

The company’s IPO opened for subscription on January 9 and will close on January 11. The total issue size is 65,50,000 shares. The shares are being issued at Rs. 51 per share, including a premium of Rs. 41 on the face value of Rs. 10. The minimum application size in the IPO is 2,000 shares, translating to Rs. 1.02 lakh, and in multiples of thereof. The shares will be listed on the NSE SME platform.

50% of the net issue is reserved for retail investors and 50% for HNI investors. 5% of the issue size is reserved for the market maker. Fedex Securities Pvt Ltd is the book-running lead manager of the IBL Finance IPO.

The company’s paid-up capital will increase from Rs. 18.18 crore to Rs. 24.73 crore post the IPO. Its reserves and surplus will increase from Rs. 11.39 crore to Rs. 38.96 crore. The promoter shareholding in the company will fall from 85.55% at present to 62.89% post the issue.

The company aims to use the funds raised to augment its Tier-I capital base to meet future capital requirements and general corporate purposes.

Improvement has been seen in the company’s financial performance with good growth in the loan book and a decline in the NPA levels. Net profit in the previous fiscal rose to Rs. 1.92 crore from Rs. 42.73 lakh in the year before that. The fundraising will enable the company to increase its capital base and enhance lending.

IBL Finance provides new-age loan services, which are seen as a high-growth area in the future. This is the first time since 2019 that an NBFC is coming out with an SME IPO. The IPO is reasonably valued. Investing in the IPO is advisable. It can deliver good gains.