Ujjivan Small Finance Bank Limited (UJJIVANSFB) Earnings Call Transcript & Summary

Good morning, everyone. I, Sanjeev Barnwal, Company Secretary of the Bank. Welcome all the members for this meeting of equity shareholders, which is being convened as per the direction of the honorable National Company Law Tribunal, Bengaluru Bench, vide its order dated September 8, 2023, to seek the approval of the shareholders for the scheme of amalgamation of Ujjivan Financial Services Limited into and with Ujjivan Small Finance Bank. This meeting is convened through video conferencing from our registered office, and participation of members through VC is being reckoned for the purpose of quorum. More than 30 members are present, as we know, which meets the quorum requirements. We also have with us Ms. Krutika Raghavan, the Chairperson appointed by the NCLT. We have with us Mr. B.A. Prabhakar, our Chairman and Independent Director of the Bank. We have Mr. Ittira Davis, the MD and CEO; we have Mr. Samit Kumar Ghosh, Non-Executive, Nonindependent Director. We have other members who have joined through online, Ms. Sudha Suresh, the Chairman of the Audit Committee and Independent Director; Mr. Ravichandran, Independent Director; Ms. Anita Ramachandran, will be joining us quite a while, and Ms. Rajni Mishra is not available to join, and she has sought leave for absence. We also have with us Mr. Sudhir Hulyalkar, who is appointed by the NCLT as the Scrutinizer for this meeting. Also, we have our Secretarial Auditor, Mr. Jayachandran, and senior management team of the Bank has also joined this meeting. I would request Krutika ma'am to give a layout of the proposal.

Thank you. This EGM is being convened for the approval of the scheme of amalgamation of Ujjivan Financial Services Limited into Ujjivan Small Finance Bank Limited. As indicated in the scheme, the proposed amalgamation would be in the best interest of both companies and stakeholders. The members are requested to refer to the part 2 of the scheme to get fully acquainted with the sailing features, rationale and advantage of the amalgamation, which inter-alia includes formation of a larger and stronger entity, avoiding operational inefficiency in the group by operating one listed entity and creating value for stakeholders. I would now request the Company Secretary to provide necessary instructions to the shareholders.

Thank you, ma'am. Dear shareholders, the bank has taken requisite steps to enable all members to participate and vote on the resolution to be considered at this meeting. Notice dated September 22, 2023, convening this meeting have already been circulated to the members. And with your permission, I take the notice convening the meeting as read. Since the meeting is being conducted, so VC and the resolution has already been put to vote by remote e-voting, there will be no formal process of moving the motion and seconding the same. Further, this meeting is deemed to be conducted at the registered office of the bank in Bengaluru. The members who have not cast their vote earlier through remote e-voting can cast their vote during the course of this meeting through the e-voting facility. Please note, this is an NCLT convened EGM for the special business, that is: to approve the proposed scheme of amalgamation of Ujjivan Financial Services Limited into and with Ujjivan Small Finance Bank Limited. We would like to inform the members that as per the provisions of the Company's Act, remote e-voting process was carried out by the Bank from Tuesday, October 31 till Thursday November 2, through the services of KFin Technologies. Please note that the scheme of amalgamation shall be acted upon only of votes in favor of the resolution is cast by majority representing 3/4 of the value of shareholders present in voting, and the votes cast by the public shareholders in favor of the resolution are more than the number of votes cast by the shareholders against it. The voting rights of equity shareholders shall be in proportion to their equity shareholding in the bank as on the close of business on October 27, 2023, which was the record date. We now request the members who have registered themselves as speakers to express their views or raise their queries. We'll request Mr. Bhaskar, moderator from KFin, to moderate the Q&A session.

Thank you. We were to begin with our first speaker, Mr. Atanu Saha. Atanu Saha currently is not logged in at this point in time into this meeting. So we will move on to our next speaker, Mr. Manjeet Singh. [Operator Instructions] Mr. Manjeet Singh from Delhi. We have not received any input from Mr. Manjeet Singh. So we'll move on to our next speaker Mr. Sarvjeet Singh from Delhi. We have not received any input from Mr Sarvjeet Singh from Delhi, so we will move on to Mr. Gagan Kumar from Delhi. Mr. Gagan Kumar from Delhi. We have not received any input. So we'll move on to Mr. Surinder Kumar Arora from Noida. [Operator Instructions] We have not received any input from Mr. Surinder Kumar Arora. So we'll move on to Mr. John Christy A from Bengaluru. [Operator Instructions]. Mr. John is not logged in at this point in time. So we'll move on to our next speaker, Ms. Lekha Satish Shah from Mumbai. Ms. Lekha?

Thank you, sir. Respected, Chairman sir, Board of Directors, and my fellow members, good morning to all of you. Myself, Lekha Shah from Mumbai. First of all, I am very much thankful to our Company Secretary team for sending the EGM notice well in time. Today's meeting, I believe any decision taken by Chairman sir, will be good for the shareholders. Chairman sir, I pray to God that he always shower his blessing upon you. Sir, I hope the company will continue video conference meeting in future. So I strongly and wholeheartedly support the special resolutions for today's meeting and my best wishes always our bank and its prosperity. Thank you so much, sir.

We'll move on to our next speaker, Mr. Rakesh Kumar from Delhi. Mr. Rakesh Kumar from Delhi. We have not received any input. So we'll move on to our next speaker, Mr. Sandeep Singh from Delhi. Mr. Sandeep Singh from Delhi. We have not received any input. So we'll move on to our next speaker, Mr. Santosh Kumar Saraf from Kolkata. Mr. Santosh Saraf from Kolkata. As there is no input, we'll move on to our next speaker, Ms. Celestine Elizabeth Mascarenhas.

Thank you so much. Respected Chairperson of today's meeting, EGM, other Board members, my fellow shareholders. I am Ms. Celestine Elizabeth Mascarenhas, I'm attending this meeting from Mumbai. First of all, I thank the Company Secretary and his team for sending me an e-notice of this EGM, well documented and well explained and also registering me as a speaker and also a big thanks to the people for giving me this platform to speak. Now as this is a Board convened meeting, and the earlier part, I had asked certain question, so I don't want to ask the same question here. Because anyway, it means that now my question will be, after this merger of the financial, Ujjivan Financial, our capital of Ujjivan Small Bank will increase a big amount. My question is, whether -- when our capital is increased, whether [ this capital will ] -- market capitalization, will also increase vis-a-vis our capital. If it increases, double, then I think that will be a great performance. Anyway, it should not go down. My second question is, could you then give us a better dividend, a little higher, could you throw some light? Because, I think it will become very strong. So the performance will be, that is my thinking will be much better, so I see that we will be great as of this small-scale -- small treasury system is very much in demand because there is a lot of micro financing required in the economy. And I would like -- one more question. As we are shareholders, whether if we want to Senior Citizens always live on deposit or the interest on deposit. So as a Senior Citizen and shareholder, can I think of a little interest more. As a senior citizen, I'll get 0.5%, and as a shareholder, another 0.5%. Can I lookout for that, because next will be after both joining the entity will be the next AGM. So this is all from me. I wish my bank all the best with this merged entity, and it will become stronger and stronger in the days to come. And I also wish you all a very festive season because now we will be very, very strong. And wish we may perform still better and whatever it is, thank you so much. And I wish all the staff good health and wealth and may the festive seasons, especially Dhanteras, bring lot of wealth for our bank with this. Thank you so much for giving me this opportunity to speak.

We will move on to our next speaker, Mr. Praveen Kumar. [Operator Instructions].

Good morning, dignitaries on dais, my fellow shareholder. Myself Praveen Kumar calling from Delhi. I [indiscernible] entire house on part of our plan since IPO original [indiscernible] value creation for regular investment on a long-term basis. Now this merger come up with Ujjivan Financial Services with the Bank and I think we will be becoming a financial powerhouse in the future and I have a deepest respect for our respected Chaiperson, Board of Director and our Company Secretary, who is the face of the company for us, maintaining higher standard of corporate governance. I requested a copy of NCLT meeting and it will be promptly delivered to me, and I'm very, very thankful, if you have any queries that will be promptly replied. So our Company Secretary is the biggest asset as per as the communication with the retail investor is concerned. So I'm very, very thankful for him and the entire team for bringing our highest standard of corporate governance in our company. This -- our bank is very, very welcoming for retail investors. It was always about [indiscernible] welcome. This bank with a golden heart listened to us, care for us, communicate with us, I mean that's truly boost our morale. So I'm very, very thankful. It's a privilege to be part of such a legacy, and I wish all the best with this merger. I supported this resolution with [indiscernible]. And I wish all the dignitaries and respected Chairperson, which is appointed by NCLT board, a Happy Diwali to all of you and wish you all the luck and all the best, and I'm very, very thankful for this opportunity? Thank you, sir. Thank you very much.

We'll move on to our next speaker, Mr. Aloysius Peter Mascarenhas. [Operator Instructions].

Respected Chairman sir, very distinguished Members of the Board and my fellow shareholders. Good morning to you all. My name is Aloysius Mascarenhas. At the outset, I thank the management for giving an opportunity to speak. I'm happy that the merger will take place. How much time will it take? And going forward I'm positive that our market cap will definitely be up, because post-merger most of the banks have already gone up like HDFC. with HDFC Bank, the market cap has gone up, so wherever -- even ICICI Bank, the market cap has gone up. So with post-merger, the bank will always do well. I'm positive on this. So I support all the resolutions, and we are in the midst of a Diwali season, and it's a good celebration. So I look forward for some sweets from you. With this, sir, thank you very much for patiently hearing. Thank you. God bless you and our Bank. Thank you.

Chairman, ma'am, the next two speakers, Mr. Vineet Nimodiya from New Delhi and Mr. Dilip Kumar Jain from Jaipur are not available. So with that, we conclude the registration session for the speakers. I hand it back to the Board to continue with the rest of the session. Thank you.

Good morning. I'd like to reply to the question which was asked a little earlier about the accretion in book value after the merger. There will be some accretion in the value, and that is part of the merger. That has been explained in more detail. The holding company coming into the books of the bank will have some increase, but it's not very substantial as the speaker said, but there is some accretion. On the market price of the share after the merger, it will all depend on the bank's performance and obviously, the market sentiment to the financial sector and the business as we go along. As for the third question, which covers the senior citizen and shareholder. We follow the RBI guidelines on this. So right now, all senior citizens are given a 0.5% or 50 basis points higher interest rate. For a short while, we had given 75 bps or 0.75%, that was only for a short while earlier. Right now, it is 0.5% or 50 basis points higher. There is nothing separate for shareholders at the moment. Thank you.

And the capital of the bank will not increase. Actually, it will marginally decrease post-merger. Because 144 crore number of shares, which UFSL holds will get canceled. And less than the 141 crore number of shares will be issued to the shareholders of UFSL. So with that was -- this will cover all the questions which we have received from the shareholders. We can proceed with the rest of the meeting. So we hereby inform the members that Mr. Sudhir Hulyalkar, NCLT appointed scrutinizer will submit his report to the Chairperson. The Chairperson shall report the result of the meeting with the NCLT within the timelines given by the NCLT. The results of e-voting shall be announced through intimation to the exchanges and will also be placed on the website of the bank. The recorded transcript of this meeting will be made available on the website of the bank as well. Members who have not cast their vote electronically can cast their votes through InstaPoll, which is open for 30 minutes after the meeting is concluded. I will request the Chairperson to please give a vote of thanks to the shareholders.

Thank you all for being the part of the meeting. The results of this meeting will be reported to the NCLT in accordance with law. I authorize the Company Secretary to receive and declare the voting results along with the scrutinizer's report and file this with the necessary authorities and intimate the necessary stakeholders. The business of the meeting is now complete. The e-voting will remain open for the next 30 minutes. And thanks all for being present.

Thank you so much.