Utkarsh Small Finance Bank Ltd IPO

The Bank is subject to stringent regulatory requirements and prudential norms of RBI and its inability to comply with such laws, regulations and norms may have an adverse effect on its business, results of operations, financial condition and cash flows.

After the completion of the Issue, its Promoter will continue to hold substantial shareholding in the Bank.

The bank is currently significantly dependent on its microbanking segment, particularly joint liability group ("JLG") loans, and any adverse developments in this segment could adversely affect its business, results of operations, financial condition and cash flows.

The Bank business is vulnerable to interest rate risk, and any volatility in interest rates or inability to manage interest rate risk could adversely affect its Net Interest Margins, income from treasury operations, business, financial condition, results of operations and cash flows.

The Bank Statutory Auditors have been debarred by the Reserve Bank of India from undertaking audit assignments for entities regulated by RBI for a period of two years with effect from April 1, 2022.

A significant portion of its advances in the microbanking segment are towards customers located in the states of Bihar and Uttar Pradesh, and any adverse changes in the conditions affecting the region can adversely impact its business, financial condition, results of operations and cash flows.

The bank has filed compounding applications on account of alleged non-compliance of the provisions of the Companies Act, 2013 relating to a public offering of securities on account of down-selling of NCDs allotted to an investor by the Bank, which may subject the Bank to, among other things, further regulatory actions.

The extent to which the recent coronavirus (COVID-19) pandemic impacts the Bank's business, cash flows, results of the operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted.

The bank has a limited operating history as an SFB and its future financial and operational performance cannot be evaluated on account of its evolving and growing scale of operations. Accordingly, the company future results may not be reflective of its past performance.

The Bank operations involve handling significant amounts of cash, making it susceptible to operational risks, including fraud, petty theft and embezzlement, which could harm the bank results of operations and financial position.