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AU Small Finance Bank

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AU Small Finance Bank Limited
Company typePublic
ISININE949L01017
Industry
Founded1996; 28 years ago (1996)
Headquarters
Area served
India
Key people
Raj Vikash Verma (Chairman)
Sanjay Agarwal (MD & CEO)
RevenueIncrease ₹9,293 crore (US$1.1 billion) (FY23)[1]
Increase ₹1,427 crore (US$170 million) (FY23)[1]
Total equityIncrease ₹6,275 crore (US$750 million) (2021)
Number of employees
30,000 (2022)
Websitewww.aubank.in

AU Small Finance Bank Limited is an Indian small finance bank,[2] based in Jaipur. It 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 serves low and middle income individuals and micro and small businesses that have limited or no access to formal banking and finance channels. The Bank offers loans, deposits and payment products and services.[4]

AU Small Finance Bank ranked 355 in the list of Fortune India 500 (2019) companies, with total B/S assets of ₹31,198.68 crore (US$3.7 billion).[5][6] AU Bank enjoys long term credit rating of “AA-/Stable” from CRISIL Ratings,[7] ICRA Ratings,[8] India Ratings[9] and CARE Ratings.[10]

History

The company was founded by 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 ~28.5% stake in the Bank. He is supported by a team of 23,486 employees.

AU Small Finance Bank is listed on NSE & BSE with market capitalization of ~Rs. 37,942 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]

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.[13]

Shareholding

Institutional holding

Over the years, the Bank has attracted marquee investors like IFC, Warburg Pincus, Temasek Holdings, Nomura, Kotak Mahindra MF, etc.[14] 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.[15][16]

Bharti SBM

May 2020 - Bharti (SBM) Holdings Pvt. Ltd, a firm owned by Sunil Mittal family has acquired 0.79% for a consideration of INR100 crores.[17]

Services

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. 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.[18]. 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. 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.[19] AU Bank also started to distribute Credit Cards in June 2022 as Launched Badlav hum se hain. AU Small Finance Bank offers a diverse range of credit cards that are designed to suit different financial needs and tastes, Credit cards never come without a buffet and a bounty of additional perks.[20]

Footprint

As on June 30, 2021, AU Small Finance Bank's distribution network comprises 1000+ Banking Touchpoints, 23,486 employees spread contiguously across 15 states and two Union Territories with over 2 million customers.

The bank has operations in 15 states and two union territory, with Rajasthan, Gujarat, Maharashtra and Madhya Pradesh being key states.[21] It is one of the largest banks by number of locations in its home state of Rajasthan.[22]

See also

References

  1. ^ a b "AU Small Finance Bank Ltd reports net profit of Rs. 424.63 crores in Q4 FY2023". EquityBulls. 25 April 2023. Retrieved 27 June 2023.
  2. ^ "AU Bank Investor Presentation Q3FY19" (PDF).
  3. ^ a b Mudgill, Amit (28 June 2017). "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 2019 - Fortune India". Fortune India.
  6. ^ "AU Bank Investor Presentation Q3FY19" (PDF).
  7. ^ "Company Factsheet". 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 www.indiaratings.co.in". Retrieved 28 March 2019.
  10. ^ "Care Ratings for AU Bank" (PDF).
  11. ^ "Stock Share Price | Get Quote | BSE".
  12. ^ Babla, Shraddha (11 July 2017). "After 51% Listing Gains, AU Small Finance Bank India's Most Expensive". Bloomberg Quint. Retrieved 15 March 2018.
  13. ^ Srivats, K.R. (2 November 2017). "AU Small Finance gets scheduled commercial bank status". The Hindu Business Line. Retrieved 15 March 2018.
  14. ^ "Shareholding Pattern Public ShareHolder".
  15. ^ Chatterjee, Paramita (7 December 2017). "PE Exits At An All-time High". BW Businessworld. Retrieved 28 March 2018.
  16. ^ "High Stakes". Outlook Business. 2 March 2018. Retrieved 28 March 2018.
  17. ^ "Sunil Mittal's Firm Buys Stake In AU Small Finance Bank". Moneycontrol. 15 May 2020. Retrieved 18 March 2021.
  18. ^ "AU Bank Investor Presentation Q3FY19" (PDF).
  19. ^ "AU Bank Investor Presentation Q3FY19" (PDF).
  20. ^ "AU Bank Credit Card".
  21. ^ "Rating Rationale: AU Small Finance Bank Limited". CRISIL. 6 December 2017. Retrieved 17 March 2018.
  22. ^ "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.
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