Usha Financial Services Limited is coming up with an IPO with a fresh issue of 58,60,000 shares worth INR 98.45 crores. The company aims to augment its capital base and general corporate purposes.

Usha Financial Services IPO – Important Dates

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Usha Financial Services Limited IPO  – Company Profile

Usha Financial Services is a non-banking finance company (“NBFC”) incorporated in the year 1995 and registered with the Reserve Bank of India as an NBFC-ICC (Investment & Credit) – base layer- non-systemically important non-deposit taking NBFC with over 9 years of lending experience. 

The company provides lending solutions to fellow NBFCs and corporates, MSMEs, and individuals, particularly to women entrepreneurs. The services also extend to Electric vehicle (EV) financing.

As of the date of this Red Herring Prospectus, the company has more than 28,000 active borrowers. 

Further, the company has established partnerships with multiple NBFCs and other companies to act as facilitators and accelerators, allowing it to provide loan services to MSMEs across various states nationwide. These agreements are customized to mutual terms and conditions, expanding the service to different locations and states. Currently, the company has established business partnerships across multiple states with thirteen business partners.

Usha Financial Services Ltd IPO Fundamental Analysis 

Usha Financial Services’, revenue grew by 38.5% in FY2024 but slowed in FY2025. Profitability improved, but EPS and RONW declined. The debt-equity ratio improved, while NAV per share dropped significantly, raising concerns about asset value per share.

1. Revenue Growth:

• Revenue (₹ in lakhs):
  • Revenue increased from ₹4,563.17 lakhs in FY2023 to ₹6,322.20 lakhs in FY2024, reflecting a growth rate of 38.5%.
  • For the first six months of FY2025, the company generated ₹2,651.14 lakhs in revenue, suggesting a slower growth pace.

2. Expense Management:

• Expenses (₹ in lakhs):
  • Expenses rose from ₹3,239.89 lakhs in FY2023 to ₹4,623.63 lakhs in FY2024, an increase of 42.8%.
  • For the first six months of FY2025, expenses were ₹2,019.19 lakhs, showing moderate control over costs, though expenses are increasing proportionally with revenue.

3. Profitability:

• Profit After Tax (PAT):
  • PAT rose from ₹1,016.55 lakhs in FY2023 to ₹1,344.95 lakhs in FY2024, a growth of 32.3%.
  • For the first six months of FY2025, PAT was ₹504.16 lakhs, indicating slower profit growth.
• Diluted EPS:
  • EPS increased from ₹7.42 in FY2023 to ₹8.64 in FY2024, showing steady earnings growth.
  • The EPS for the first half of FY2025 stands at ₹3.18 (not annualised), suggesting continued earnings but at a reduced pace.

4. Equity and NAV Analysis:

• Equity (₹ in lakhs):
  • Equity rose from ₹8,207.38 lakhs in FY2023 to ₹10,602.63 lakhs in FY2024, and further to ₹11,106.79 lakhs by September 2024, indicating growth in shareholder capital.
• NAV per Equity Share:
  • NAV per share dropped from ₹87.14 in FY2023 to ₹66.78 in FY2024, and down further to ₹7.00 by September 2024, which raises concerns about declining asset value on a per-share basis.

5. Return on Net Worth (RONW):

• Efficiency:
  • RONW declined from 15.67% in FY2023 to 14.30% in FY2024, and to 9.29% (not annualised) for the first six months of FY2025. This trend reflects a diminishing return on equity, which is concerning for investors seeking high returns.

6. Financial Health Indicators:

• Debt-Equity Ratio:
  • The debt-equity ratio improved from 3.02 in FY2023 to 1.71 in FY2024, indicating a reduction in leverage.
  • By September 2024, the debt-equity ratio was stable at 1.70, suggesting that the company has managed to reduce its debt burden, though it remains moderately leveraged.
• Total Assets and Liabilities:
  • Total assets dropped slightly from ₹37,222.64 lakhs in FY2023 to ₹33,585.81 lakhs in FY2024 and remained stable at ₹35,133.66 lakhs by September 2024.
  • Total liabilities also declined from ₹29,015.26 lakhs in FY2023 to ₹22,983.18 lakhs in FY2024, indicating a decrease in the company’s debt, which is a positive sign of improving financial stability.

Usha Financial Services IPO Financial Analysis

Usha Financial Services Limited IPO Peer Comparison

Usha Financial Services Limited posted a profit after tax (PAT) of ₹1,344.95 lakhs with an EPS of ₹8.64, RoNW of 14.30%, and NAV of ₹66.78. IBL Finance Limited recorded a PAT of ₹228.35 lakhs, EPS of ₹1.17, RoNW of 8.47%, and a P/E ratio of 65, though its NAV is not available.

Usha Financial Services Ltd IPO Objective

The main objective of Usha Financial Services is to utilize INR 70 crores from the Net Proceeds to augment its capital base to support future business expansion. The remaining funds will be used for general corporate purposes, including operational expenses.

1. To augment the capital base: The Company proposes to utilize INR 70 crores of Net Proceeds from the Issue towards augmenting the capital base of the Company to fulfill its future capital requirements, which are anticipated to arise as a result of the expansion of the business and assets. 

2. General corporate purpose: The company will deploy the balance of funds for general corporate purposes, including meeting operating expenses and initial development costs for various projects, strengthening business development and marketing capabilities, and addressing unforeseen exigencies in ordinary operations.

Usha Financial Services IPO Risks And Challenges

Usha Financial Services’ financial health is vulnerable to credit quality issues, dependency on top customers for 40% of revenue, and evolving regulatory compliance, which may increase costs and risk penalties.

1. Any deterioration in the credit quality of the loans could adversely affect the business, results of operations, financial condition, and cash flows. 

2. Almost 40% of the revenue comes from top 10 customers. The loss of a major customer or significant reduction in demand from any of the major customers may adversely affect the business, financial condition, results of operations, and prospects.  

3. The company is required to comply with guidelines issued by regulatory authorities in India, which are evolving and may increase the compliance costs and subject it to penalties. 

Usha Financial Services Ltd IPO  – Industry & Market Potential

The non-banking Financial Companies (NBFC) sector in India has reached an impressive market size of USD 326 billion, underscoring its expansive influence within the financial landscape. This growth highlights the sector’s robust performance and strategic importance, driven by various factors such as increasing digital penetration, favourable government policies, and innovative service delivery to underserved regions. 

Such specific figures demonstrate the significant role NBFCs play in the broader economic framework and validate the projected compound annual growth rate (CAGR) of 13-15% between 2023 and 2025.   

Usha Financial Services Limited IPO – Type of Offer

Usha Financial Services Limited is launching an IPO with a fresh issue of 58,60,000 shares, valued at INR 98.45 crores. The company intends to use the funds to augment its capital base and for general corporate purposes.

Usha Financial Services IPO Offer Size

The offer size for Usha Financial Services Limited’s IPO is INR 98.45 crores, with a fresh issue of 58,60,000 shares. The company aims to utilize the funds to augment its capital base and for general corporate purposes.

Usha Financial Services Limited IPO Allotment Structure

Usha Financial Services Limited’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. 3,20,800 shares are reserved for market makers.

 ● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

● Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

● Market Maker Reservation: A portion of shares, i.e. 3,20,800 shares, are reserved for market makers. 

Read more about Usha Financial Services Ltd IPO Allotment Status

How to apply for the Usha Financial Services IPO?

To apply for the Usha Financial Services Limited IPO through Alice Blue, follow these steps:

Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.

1. Check for IPO Details: Once your account is active, you can check for the Usha Financial Services Limited IPO details in the IPO section of the Alice Blue platform.
2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
3. Submit the Application: Confirm all your details and submit your application.

 You can apply for the Usha Financial Services Limited IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

Read more about Usha Financial Services IPO Day 1 Subscription

How do you check Usha Financial Services IPO Allotment Status?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or the trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the Usha Financial Services Limited IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Usha Financial Services Limited IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

If you face any issues, we request you reach out to our customer support team at Alice Blue for detailed assistance. 

Apart from Alice Blue, there are other ways to check the allotment status of the Usha Financial Services Limited IPO:

● Registrar’s Website: Visit the website of Skyline Financial Services Private Limited, the registrar of the Usha Financial Services Limited IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

 ● NSE SME: You can also check the allotment status on the official website of the National Stock Exchange (NSE) Small Medium Exchange (SME). You would need your application number and PAN to check the status. 

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

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Usha Financial Services Ltd IPO Offer Registrar

The registrar for the Usha Financial Services Limited IPO is Skyline Financial Services Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar: 

Skyline Financial Services Private Limited

D-153 A, 1st Floor, Okhla Industrial Area, 

Phase – I, New Delhi-110020 

Email: [email protected] 

Website: www.skylinerta.com

Read more about Usha Financial Services IPO Day 3 Subscription

Usha Financial Services IPO  – FAQs

1. What is the allotment date of the Usha Financial Services IPO? 

The allotment date of the Usha Financial Services Limited IPO is October 29, 2024. 

2. What is the price band of the Usha Financial Services IPO? 

The price band of the issue is INR 160-168 per share. 

3. What is the size of the Usha Financial Services IPO? 

The offer size for Usha Financial Services Limited’s IPO is INR 98.45 crores, with a fresh issue of 58,60,000 shares. The company aims to utilize the funds to augment its capital base and for general corporate purposes.

4. What is the listing date of the Usha Financial Services IPO? 

The listing date of Usha Financial Services Limited’s IPO is October 31, 2024.