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Initial Public Offer - Note

Issue Highlights:

Issuer: AU Small Finance Bank Limited

Issue Type: 100% Book Built Issue IPO

Issue Open: Wednesday, June 28, 2017

Issue Close: Friday, June 30, 2017

Issue Size (Rs): Offer for sale of 5,34,22,169 shares (Rs.

1,896.49* Cr – 1,912.51^ Cr)

Face Value: Rs.10 per Equity Share

Price Band: Rs. 355 – Rs. 358 per Equity Share

Minimum Order Quantity Retail: 41 Shares and in

multiples thereof

Maximum Bid amount for Retail: Rs. 2 Lakhs

Employee Reservation: 1,00,000 Equity Shares

Listing: NSE & BSE

Issue Size and Investor Category Allocation

Total Issue Size: 5,34,22,169 Equity Shares^

QIB: 50% of the issue size (2,62,11,083 Equity Shares^)

NIB: 15% of the issue size (78,63,326 Equity Shares^)

Retail: 35% of the issue size (1,83,47,760 Equity Shares^)

*Lower Price Bank, ^ Upper Price Band

Book Running Lead Managers:

ICICI Securities, Citigroup Global, HDFC Bank, Motilal Oswal

Registrar:

Link Intime India Pvt Ltd

Key Business Strategies:

Leverage Existing Capabilities and Customer Base as it

would transit into a Retail Focused SFB

Grow SFB Branch Network in the Existing Markets

Provide a Comprehensive Suite of Banking Services

Leverage Technology to Grow the Business

Enhance the Brand Presence

Key Strengths:

Diversified Product Portfolio and Revenue Streams

Customer Centric Organizational Commitment

Significant Presence in Rural and Semi-Urban Markets

with Focus on Low and Middle Income Customers

Robust and Comprehensive Credit Assessment and Risk

Management Framework

Access to Diversified Sources of Funding over the Years

Experienced Management Team and Qualified

Operational Personnel

Objects of the Issue:

1. To achieve the benefits of listing the Equity Shares on the

Stock Exchanges and for the Offer for Sale of 53,422,169

Equity Shares.

2. General Corporate Purpose.

Public issue of 5,32,22,169 equity shares of Rs. 10/- each

(“equity shares”) of AU Small Finance Bank Ltd (Company or

Issuer).

About the Issuer:

It is a prominent, retail focused non-banking finance company

(“NBFC”) primarily serving low and middle income individuals and

businesses that have limited or no access to formal banking and

finance channels. It operate in three business lines: vehicle finance;

micro, small and medium enterprises (“MSMEs”) loans; and small

and medium enterprises (“SMEs”) loans.

As part of current offerings, its vehicle finance business extends

loans for the purchase of new and pre-owned vehicles and for

refinancing of vehicles, which are primarily used for revenue

generating activities. For the six months ended September 30, 2016

and the financial year 2016, the average ticket size of its vehicle

finance loans was Rs.0.33 million and Rs.0.34 million, respectively

It has access to diverse sources of liquidity, such as term loans and

working capital facilities; proceeds from loans assigned and

securitized; proceeds from the issuance of non-convertible

debentures (“NCDs”) and commercial paper; and subordinated debt

borrowings from banks, mutual funds, insurance companies and

other domestic and foreign financial institutions to meet the funding

requirements.

Revenue from Operations (Rs. Millions)

Net Profit After Tax (Rs. Millions)

4106.565655.09

6870.2

10469.31

0

2000

4000

6000

8000

10000

12000

FY 13 FY 14 FY 15 FY 16

693.58 725.4

1394.5

2471.54

0

500

1000

1500

2000

2500

3000

FY 13 FY 14 FY 15 FY 16

AU Small Finance Bank Limited

AU Small Finance Bank Limited

Call Toll Free 1800-425-8282

SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED

Initial Public Offer - Note

AU Small Finance Bank Limited

AU Small Finance Bank Limited

(₹ In Millions)

As at

September

30, 2016

As at

March

31, 2016

As at

March

31, 2015

As at

March

31, 2014

As at

March

31, 2013

As at

March

31, 2012

Equity and liabilities

Shareholders' funds

Share capital 457.25 440.81 440.81 429.64 404.71 925.75

Reserves and surplus 16,678.57 9,565.85 7,223.70 5,547.89 4,013.93 2,890.79

17,135.82 10,006.66 7,664.51 5,977.53 4,418.64 3,816.54

Non-current liabilities

Long-term borrowings 30,284.65 28,108.52 15,795.67 12,734.59 14,625.13 2,462.04

Other long-term liabilities 527.45 567.33 431.02 149.76 121.89 152.09

Long-term provisions 518.75 322.30 263.65 224.83 116.21 85.77

31,330.85 28,998.15 16,490.34 13,109.18 14,863.23 2,699.90

Current liabilities

Short-term borrowings 7,036.52 10,065.76 9,726.36 4,684.67 6,777.76 2,844.26

Other current liabilities 13,878.84 13,444.83 5,746.78 5,737.76 5,026.85 2,167.44

Short-term provisions 1,215.72 214.69 171.05 76.77 41.62 42.78

22,131.08 23,725.28 15,644.19 10,499.20 11,846.23 5,054.48

TOTAL 70,597.75 62,730.09 39,799.04 29,585.91 31,128.10 11,570.92

Assets

Non-current assets

Fixed assets

Property, Plant and Equipment 278.64 224.61 172.26 160.52 158.14 148.41

Intangible assets 17.39 17.44 12.88 8.08 8.14 2.27

Capital work-in-progress 176.25 3.91 4.66 - 1.37 2.42

Intangible assets under development 282.14 - - - - -

Non-current investments 993.14 593.43 1,126.53 873.61 566.72 305.50

Deferred tax assets (net) 101.79 211.15 363.77 306.14 156.56 87.54

Receivable under financing activity 39,596.71 37,804.55 22,481.63 14,914.13 11,930.39 5,676.41

Long-term loans and advances 89.81 88.51 117.54 162.25 129.75 220.04

Other non-current assets 52.98 64.48 54.35 45.32 430.89 482.26

41,588.86 39,008.08 24,333.62 16,470.05 13,381.96 6,924.85

Current assets

Current investments 2,625.26 1,722.26 271.87 261.98 6,820.16 3.63

Cash and bank balances 1,703.64 1,234.34 2,029.24 2,033.64 3,760.20 1,687.56

Receivable under financing activity 23,847.79 20,088.88 12,749.91 10,253.14 6,617.21 2,771.59

Short-term loans and advances 303.40 210.15 138.67 330.73 325.64 84.76

Other current assets 528.80 466.38 275.73 236.37 222.93 98.53

29,008.89 23,722.01 15,465.42 13,115.86 17,746.14 4,646.07

TOTAL 70,597.75 62,730.09 39,799.04 29,585.91 31,128.10 11,570.92

Call Toll Free 1800-425-8282

Source for Note: DRHP

IMPORTANT: Please read the Red Herring Prospectus of this issue carefully before investing in the same.

:: Research Desk :: :: Research Desk ::

E-mail:

karvy.advisor@karvy.com

Direct Ph: 040 3321 7132

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contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the

accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss

incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors.

Investors must make their own investment decisions based on their specific investment objectives and financial position

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associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this

document.

PF/IPON/19062017/30

SUMMARY STATEMENT OF PROFITS AND LOSSES, AS RESTATED

Initial Public Offer - Note

AU Small Finance Bank Limited

AU Small Finance Bank Limited

(₹ In Millions)

for the half

year ended

For the year ended

September

30, 2016

March 31,

2016

March

31, 2015

March

31, 2014

March

31, 2013

March

31, 2012

Income

Revenue from operations 6,924.83 10,469.31 6,870.20 5,655.09 4,106.56 2,298.58

Other income 18.57 50.19 23.88 58.11 24.28 8.35

Total Revenue (I) 6,943.40 10,519.50 6,894.08 5,713.20 4,130.84 2,306.93

Expenses

Employee benefit expenses 748.11 1,577.27 945.16 696.77 526.83 385.93

Finance costs 2,525.67 3,952.53 2,819.74 2,875.60 1,971.84 1,033.39

Depreciation and amortization expense 25.72 85.21 65.15 32.96 29.11 17.25

Other expenses 751.80 875.24 504.44 404.19 408.61 258.11

Provisions and write offs 249.67 256.82 486.53 607.17 167.77 58.38

Total expenses (II) 4,300.97 6,747.07 4,821.02 4,616.69 3,104.16 1,753.06

Profit before exceptional items and tax (III)=

(I)-(II)2,642.43 3,772.43 2,073.06 1,096.51 1,026.68 553.87

Exceptional Item (IV) 6,702.98 - - - - -

Profit before tax (V)= (III)+(IV) 9,345.41 3,772.43 2,073.06 1,096.51 1,026.68 553.87

Tax expenses:

Current tax 2,339.06 1,150.78 756.58 507.70 401.34 240.62

Deferred tax 109.37 152.62 (57.63) (149.58) (69.01) (59.63)

Tax relating to earlier periods 44.13 (2.51) (20.39) 12.99 0.77 -

Total tax expenses (VI) 2,492.56 1,300.89 678.56 371.11 333.10 180.99

Profit after tax (as restated) (VII)=(V)-(VI) 6,852.85 2,471.54 1,394.50 725.40 693.58 372.88

Earnings per equity share

(including exceptional item)

Basic (Rs.) 154.77 56.07 31.85 17.91 20.40 22.25

Diluted (Rs.) 152.68 55.71 31.85 17.91 17.14 11.70

Nominal value per share (Rs.) 10.00 10.00 10.00 10.00 10.00 10.00

Earnings per equity share

(excluding exceptional item)

Basic (Rs.) 38.05 56.07 31.85 17.91 20.40 22.25

Diluted (Rs.) 37.54 55.71 31.85 17.91 17.14 11.70

Nominal value per share (Rs.) 10.00 10.00 10.00 10.00 10.00 10.00