IPO

Banks Always Want Money


And our IPO of the day for 18^th March 2021 is Suryoday Small Finance Bank (SSFB).
 
The Company

SSFB was started as a microfinance company back in 2008.
After 9 years as a microfinance company, they finally secured a small finance bank licence from the RBI in 2017.

And things have been pretty good since then.

• The bank now has 477 branches with over 14 lakh customers.
• They've grown their loan book to over Rs 3,900 crores on a deposit base of Rs 2,800 crores. Over 70% of these are ‘micro loans’
• SSFB reported a 23% growth in net profit in Financial Year 2019-20 at Rs 111 crores.
•  

The IPO

As per RBI rules, a bank is supposed to go public within 3 years of reaching a net worth of Rs 500 crores.

For SSFB, this happened sometime in 2017 and so they filed their IPO papers in 2020. (The IPO is happening a little bit later than the mandated 3 years but we guess itna toh chalta hai)
 
The bank is planning to raise Rs 582 crores.
The offer will be a mix of a fresh issue of shares worth Rs 249 crores. This money will go to the company to bolster its capital needed for further expansion.

The balance ~Rs 333 crores raised in the IPO will be used to give existing shareholders a chance to cash in on part of their holdings. These shareholders include several PE funds like Gaja Capital, ASK and TVS Capital. HDFC, IDFC First Bank, Kotak Mahindra Life Insurance Company and the World Banks IFC are also among major investors in the bank.
 
The offer actually opened yesterday along with Nazara Technologies and tomorrow is the last day to subscribe.

Disclaimer: This is not investment advice. Please consult a certified investment advisor before making an investment decision.

PS: We're struggling to find new and fun intros and gifs to go with the IPO stories these days since there are so many! Hit us up if you have anything cool in mind.

Tech

Communication Is Key

 

We have a major acquisition for our startup ecosystem.

Twilio just acquired the Indian startup ValueFirst.

So both of these companies may seem a bit unfamiliar. That's because like YAP that we covered yesterday, both these companies work behind the scenes.

What is this Twilio?

Twilio is all about contacting your customers.
No, they aren't a call centre but they provide APIs (explanation here) that allows applications to talk to it and make communications happen.

Their APIs are available across the whole spectrum of communications as well. Both over telecom and the internet.
Before Twilio it took tons of upfront capital and technical expertise to implement what now feels like fairly basic functions of an app like sending OTPs, SMS alerts etc.


This may sound a bit confusing so maybe an example of Twilio will help clear it up:

• You know how a lot of times you have to enter an OTP while logging into an app or even for online transactions. Twilio provides APIs so companies can simply send you that OTP

What does ValueFirst Do?

ValueFirst also connects businesses with customers.
You can think of them as kind of like the desi Twilio. But it's not just another Indian clone.
ValueFirst in fact started in 2003, which is before Twilio which began in 2008.

Last fiscal year ValueFirst processed over 42 billion SMS messages, easily making it one of India's largest players in the space.

The Takeaway

Twilio recently opened its own R&D centre here in India. India is an extremely important market for them as per their own words and understandably so. We are seeing significant growth in mobile messaging.
Twilio will hope to benefit from ValueFirst's market know-how and existing product offerings to rapidly grow here in India.

Tech

Tech Snippets



PolicyBazaar Raises $75 million

The insurance marketplace Policybazaar just raised $75 million.
PolicyBazaar basically aggregates insurance policies so their users can easily compare and buy insurance.

They've already raised $630 million but are raising more because of their expansion plans. They are looking to launch their product in the UAE and the middle east.

There have been plenty of talks about how they plan on going public sometime next year.
So raising these funds and expanding internationally seems pretty smart.

You May Invest In Startups

The government is finally lifting its restrictions on non-government provident funds.
What happened earlier was that these guys weren't allowed to invest in alternate investment funds(AIFs).

Now that won't be the case as the gov has allowed non-government provident funds to invest up to 5% of their investible surplus.

Why is this important?

Indian startups end up relying a lot on foreign capital because of fewer options available in local funding.

In fact, by some estimates, more than 85% of investments in Indian startups come from outside.
Now with the new rule, it should in theory lead to a lot more domestic capital flowing into Indian VCs and AIFs.
Which in turns means more companies getting funded.  More companies being funded means more products being built out of India.

So now if we indirectly become investors in startups through this, can we put "Startup Investor" in our Twitter bio? Asking for a friend.

• This YouTuber tried cooking a chicken by 'slapping' it repeatedly (some wacky physics principles apparently). Watch his experiment here.
• The worlds most expensive honey is this Cave-harvested Turkish Centauri Honey at $12,000 per kg. We're wondering if it's as good as Patanjali? 🤔

If you have more time ...

• The RBI and the gov both want to retain the 2-4% inflation target band.
• Plant-based startup Oziva has raised $12 million.

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