UTKARSH MICRO FINANCE LTD.

406, B-Wing, Prathmesh Tower, Senapati Bapat Marg, Lower Parel (W), Mumbai – 13, vaishali@arthunlisted.com , invest@arthunlisted.com , +91 8452974412, 9930514109, 022-24100335, 24100336 ,

website: www.arthunlisted.com

Basic Information

Vision

To be the trusted financial service provider to over 10 million customers by 2021.

Mission

To provide affordable & accessible banking services which are process centric,technology enabled and people oriented resulting in reliable, scalable andsustainable institution facilitating socioeconomic change.

Values

1. Customer & Employee Centric2. Transparency & Fair Practice3. Responsible & Responsive Service4. Integrated Social Values5. Striving for Excellence

Vision, Mission & Value

No. of Shares

CAPITAL STRUCTURE HISTORY

The target geography for Utkarsh's services will be the Northern and Central belt, which covers a vast, untappedmarket where a small number of MFIs have successfully begun operations. It started its operations in August2009 with four branches, two urban and two rural branches in Varanasi district and subsequently it hasexpanded to One Hundred and Eight other districts. The company operates from 369(346 JLG, 23 MicroEnterprize Loan and Housing Loan business is being operated from MEL branches )branches in these OneHundred Nine districts as on 31st Dec, 2016.

In 2011-12, the company expanded its operations in Bihar and in FY 2012-13, the company started operationsin Uttarakhand, Madhya Pradesh, Delhi, besides penetrating deeper in Bihar. In FY 2013-14, the companyfurther expanded to Haryana, Maharashtra, Himachal Pradesh & Jharkhand. The company plans to penetratedeeper in Bihar, Maharashtra and Madhya Pradesh

Utkarsh Micro Finance Ltd focuses on serving the bottom-of-the-pyramid (BOP) customer segment.

The company’s customer base is predominantly women focused; the joint liability group loans are specificallydesigned for the lower-income women.

The Varanasi headquartered MFI has operations in Uttar Pradesh, Bihar, Jharkhand, Maharashtra, M.P.,

Chhattisgarh, Delhi-NCR, Uttarakhand, Haryana and Himachal Pradesh.

Currently, it is serving over 1.2 million clients with a portfolio of over Rs 1,809 crores.

Utkarsh MFI got RBI’s “in-principle” approval to set up a small finance bank in October 2015 and is theonly and sole lender in U.P to get a small bank license.

In November 2016 it has received final license from The Reserve Bank of India (RBI) to start operationsas Small Finance Bank (SFB). The new SFB will be named as 'Utkarsh Small Finance Bank Ltd-' and islikely to start banking operations in early 2017.

Utkarsh Micro Finance will become a holding company with limited business and the small finance bank entitywill be a 100% subsidiary of the holding company.

Introduction

Financial Highlights As Of 2016-03-31

Capital Structure As of 2016-03-31

Nominal value as Per Share Rs 10

• Ms. Shubhalakshmi A. Panse (Independent Director )

Having more than 3 decades of experience in diverse disciplines of banking sector like creditmanagement, recovery, retired as Chairman and Managing Director of Allahabad Bank and alsobeen executive Director in Vijaya Bank and General Manager in Bank of Maharashtra. 1st womanto lead India oldest bank (Allahabad Bank). Gold medalist in M.Sc. from Pune University and alsoholds an MBA Degree from Drexel University, USA.

• Mr. Atul (Independent Director )

Having more than 3 decades of Administrative Service experience. An Indian Police Service (IPS)officer of 1976 batch. Has served as SP, CBI and DIG, CBI in charge in UP. Successfully served inthe areas of Kanpur, Allahabad, Pauri- Garhwal, Gonda and Etawah as SSP/SP with distinctionfacing many challenge of Law and Order, Crime and elections etc. Awarded Presidents PoliceMedal for long and meritorious service.B.Sc. (Physics, Math's, Statistics) Lucknow University,M.Sc. (Physics) Lucknow University.

• Ramni Nirula (Independent Director)

Having more than 3 decades of financial sector experience, majorly in the domain of corporatebanking, government banking and securities. Retired as Senior General Manager from ICICI Bank.Also been a Director of Jindal Steel & Power Ltd, Abhishek industries Ltd and Ballarpur IndustriesLtd. Master's in Business Administration from Delhi University

DIRECTORS & SENIOR MANAGEMENT

• Mr. Aditya Parekh (Nominee Director from Faering Capital)

Having extensive experience in financial services, while working with DSP Merrill Lynch, TranServ PrivateLimited, Wealth India Financial Services Pvt Ltd and Linkstreet Learning Pvt. Ltd. Co-Founder andManaging Director at Faering Capital and Faering Capital India Evolving Fund.BA in Economics fromCambridge University and M.B.A. from University of Pennsylvania - The Wharton School.

• Mr. Gaurav Malhotra (Nominee Director from CDC (Commonwealth Development Corporation) GroupPlc.)

Having extensive experience in growth strategy, consumer behavior, distribution networks, operations,IT, management consulting, advisory assignments and investments in financial institutions while workingwith CDC Group and Boston Consulting Group and other financial institutions. Engineering Graduate andMBA from Indian Institute of Management Bangalore.

• Mr. Harjeet Toor (Nominee Director from RBL Bank Limited.)

Business Head of Micro Banking, Credit Cards, Retail & MSME lending at RBL Bank Ltd. Having extensiveexperience as an entrepreneurial business leader with over 23 years in consumer banking across NBFC'sand Banks spanning Fullerton India Credit Company Ltd. (FICCL), RBS, ABN AMRO Bank of America. Hasbeen in various leadership has worked in leadership roles across varied functions in Marketing, ProductManagement, Sales & Distribution, Branch Banking and Finance. An Engineer and a managementgraduate from Faculty of Management Studies, Delhi.

Mr. Vishal Mehta (Nominated Director from Lok Capital )Co-founder of Lok Advisory Services. Having extensive experience in financial services whileworking with Capital One, Siemens, PRTM and also as a consultant to social projects in India andKenya.Engineering from Delhi University and MBA from the University of Michigan, Ann Arbor.

Mr.Raghvendra Singh (Managing Director & CEO)Having over 40 years of rich experience in public domain and supervision of the teams. He joinedthe Uttar Pradesh Police Department as a Sub-Inspector in 1975 and retired as DeputySuperintendent of Police (Dy.SP) in 2015, having hands on experience of Vigilance / Anti-Corruption work, other than the normal police roles. Also received many rewards and medalsfrom State Government and President of India, the prominent ones being, Gallantry Medal (1985),Sarahniya Sewa Padak(1989), Utkristha Sewa Padak (1995), United Nations Peace Medal(1996),President Medal (1996) and President Police Medal (2007)B.Sc and PGDCA from Udai PratapCollege, Varanasi.

Mr.Shyam Sundar Rai (Whole Time Director & Chief Financial Officer)Having over 16 years ofexperience in Accounts, Taxation and Audit in large and medium sized finance companies andindustries in the domain of accounting of Banks, Insurance companies and Micro FinanceCompany.Chartered Accountant by profession and is a fellow member of ICAI. Also qualifieddiploma course in Information System Audit by ICAI.

Milestones in 2016-17:

• Skoch Award (Gold) – 2016 for inclusive insurance.

• CARE has revised company’s Long term bank facilities to CARE A from CARE A-.

• CARE has revised company’s NCD rating facility to CARE A from CARE A-.

• Received final license for Utkarsh Small Finance Bank Ltd .

Milestones in 2015-16:

• Expanded in the region of Chhattisgarh and Jharkhand.

• Client base more than 10 lakh - achieved stated (in 2009) VISION for 2016.

• Grading upgraded to M1 (Highest) from M2+ by ICRA Ltd.

• CARE has assigned A- on Bank Loan rating.

• CISME award - MSME Banking Excellence Award.

Milestones in 2016-17:

Shareholding Patterns as of 2016-03-31

Shareholding Patterns as of 2016-03-31Profit & Loss Statements From Mar,2014 To Mar,2016

Profit & Loss Statements From Mar,2014 To Mar,2016

Balance Sheet From Mar,2011 To Mar,2016

Balance Sheet From Mar,2011 To Mar,2016

Ratios Comparison From March,2011 To March,2016

Ratios Comparison From March,2011 To March,2016

Our Recommendation

Our RecommendationEPS & BV

Growth Prospects

Utkarsh Small Finance Bank looks to cross-sell insurance;

Plans 400 branches

Will focus on non-micro-finance sectors such as MSMEs, housing and retail

loans

The newly-formed Varanasi-based Utkarsh Small Finance Bank will look to

cross-sell insurance products through its branches from July.

Utkarsh plans to have a network of 400 branches by the end of this fiscal.

While nearly 350 of its existing micro-finance branches will be upgraded to

small finance bank branches, another 50 will be new additions.

Utkarsh currently has a customer base of 12 lakh across 10 major States

— Uttar Pradesh, Bihar, Jharkhand, Uttarakhand, Maharashtra,Madhya

Pradesh, Delhi, Haryana, Himachal Pradesh and Chhattisgarh.

According to Govind Singh, MD and CEO, the bank has already tied up with

ICICI Prudential Life, Shriram Life, HDFC Life and HDFC Ergo to cross-

sell both life and general insurance offerings

• Interest rates

However, Singh expects mobilisation of deposits (in its previous stint as an

MFI the company was not allowed to take deposits) as one of the major

advantages. “Our overall blended borrowing costs will come down by 100 to

150 basis points this year because of accretion of deposits. The current cost

of loans I have taken from banks would range between 11 and 13 per cent.

We expect overall cost of deposits to be in the range of 8 to 8.5 per cent,” he

explained.

As far as term deposits are concerned, Utkarsh offers interest at around 100-

150 basis points higher than large banks (varying at 8.25-8.5 per cent), while

for savings deposits the rate is 6 per cent. “Our lending rates will remain the

same initially. My funding is still from the old term loans we had taken from

banks. We expect around 100-200 basis-point reduction in the cost of

lending for the asset side, but that will happen gradually,” he explained.

For joint lending group (JLG) or micro-finance, it is still 24 per cent, while

Utkarsh has stopped charging loan processing fees for disbursals of over

₹25,000. But, in case of MSME lending, the rates have come down to 18-20

per cent, from 24-26 per cent.

(This article was published on June 26, 2017)

Buzz about Microfinance ……

Will microfinance companies be your next bet amid market exuberance?

These stocks, available at cheap valuation, may double your investment returns in the next three

years amid the government's drive for financial inclusion, a key to the country’s much cherished

double digit economic growth.

While the government's push for financial inclusion will offer huge opportunities for such companies,

Digital India will help them lower input costs, thus improve margins, Says financial market experts

The demonetization impact has impaired the prospect of these companies. Their receivables are

scattered all across the rural belt, but the negative effect will get over by September or so,” he said,

adding “Investors could see their investment returns doubling in three four years.

source

http://economictimes.indiatimes.com/articleshow/59794265.cms?utm_source=contentofinterest&ut

m_medium=text&utm_campaign=cppst

Indian Microfinance industry will continue to demonstrate sustainable growth 22 Apr, 2017, 12.20PM

IST

The key reason for the growth of the sector has been adaptability to change, resilience in the face of

challenges and an ability to maintain high repayment rates of almost 99.5%.

Microfinance Industry up 53% in Q3: MFIN Report 16 Feb, 2017, 04.21PM

The aggregate gross loan portfolio of microfinance institutions stood at Rs 56,634 crore in Q3 FY17 as

compared to Rs 36,912 crore in Q3 FY15-16.

• Our book size will be Rs 10,000 crore in 5 years: Govind Singh, Utkarsh Small Finance BankOur current cost of funds is more than 12%. It used to be in the 13.5% to 14% range a yearago.2 Aug, 2017, 08.40AM IST

• HDFC ERGO Joins Hands with Utkarsh Small Finance Bank to Offer General Insurance Products

• Utkarsh to launch Small Finance Bank on January 23 ,This is the first one to launch operationafter demonetisation in this small finance bank,22 Jan, 2017, 06.40PM IST

• Utkarsh to launch Small Finance Bank on January 23 ,This is the first one to launch operationafter demonetisation in this small finance bank,22 Jan, 2017, 06.40PM IST

• "Utkarsh is also in process of completing secondary transactions by providingcomplete/pa…..12 Oct, 2016, 02.19PM IST

• Utkarsh MF gets RBI nod for small finance bank ,Press Trust of India | Mumbai November 28,2016 Last Updated at 17:28 IST

• Utkarsh Micro Finance raises Rs 30 crore short term funds from Ratnakar Bank,By Atmadip Ray,ET Bureau|Updated: Oct 12, 2015, 03.46 PM IST

• Utkarsh Micro Fin to raise Rs 500 crore , Sep 22 2015 : The Times of India (Chennai)

UTKARSH IN MEDIA

Disclaimer :

Investments in Unlisted/Pre IPO shares have the potential of giving

high returns, they are also accompanied by higher risk due to a variety

of reasons. Investors need to exercise caution while investing in

Unlisted/Pre IPO companies. Generally, they should have a minimum

time horizon of 3 years and should not allocate more than 50% of their

equity portfolio in Unlisted/Pre IPO shares.

All facts and figures taken from the shareholders report available in

public domain.

Thank You

ArthUnlisted ,406, B-Wing, Prathmesh Tower, Senapati Bapat Marg, Lower Parel (W), Mumbai – 13, vaishali@arthunlisted.com , invest@arthunlisted.com , +91 8452974412, 9930514109, 022-24100335, 24100336 ,

website: www.arthunlisted.com