ESAF Small Finance Bank IPO Basis of Allotment

^^AFTER EMPLOYEE DISCOUNT

WACA: Weighted average cost of acquisition on fully diluted basis 'As certified by A. John Moris & Co.. Chartered Accountants pursuant to their certificate dated November 8, 2023.

^A DISCOUNT OF S.R5 PER EQUITY SHARE WAS OFFERED TO ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION

1. Our business is concentrated in Kerala and Tamil Nadu. As at June 30, 2023, 43.43% and 13.86% of our banking outlets were in Kerala and Tamil Nadu, respectively, 43.45% and 22.14% of our gross advances were from customers in Kerala and Tamil Nadu, respectively, and 80.04% and 3.36% of our deposits were from banking outlets in Kerala and Tamil Nadu, respectively. Any adverse change in the economies of those states, could have an adverse effect on our financial condition, results of operations and cash flows.

2. As at June 30,2023, and March 31,2023,2022 and 2021,75.15%, 75.35%, 83.59% and 85.50% of our advances (net of provisions) were unsecured advances, respectively. If we are unable to recover such advances in a timely manner or at all, our financial condition, results of operations and cash flows may be adversely affected.

3. As at March 31, 2023, we were in non-compliance with 17 out of the 272 Risk Based Supervision Tranche III requirements and if the Reserve Bank of India imposes penalties on us for this non-compliance, it could adversely affect our reputation, business, financial condition, results of operations and cash flows.

4. As at June 30,2023 and March 31,2023,2022 and 2021,74.70%, 75.04%, 81.16% and 84.80%, respectively, of our advances under management were Micro Loans. Any decrease in demand for our Micro Loans could adversely affect our business, financial condition, results of operations and cash flows.

5. Under the provisions of the SFB Licensing Guidelines, the RBI In-Principle Approval and the RBI Final Approval, the Equity Shares are required to be mandatorily listed on a stock exchange in India within three years from the date our Bank reached a net worth of ^5.00 billion, which we reached on July 31,2018. Therefore, the Equity Shares were required to be listed on a stock exchange in India before July 31,2021, which we did not comply with. We could be subject to various sanctions and penalties by the Reserve Bank of India (RBI) for failing to comply with this requirement. The RBI pursuant to its letter June 9,2023 observed that our Bank continued to be in violation of the listing deadline and directed our Bank to ensure that the Equity Shares are listed by November 30,2023.

6. We are currently in non-compliance with certain major observations of the RBI noted in its regular inspection reports, which we are in the process of rectifying. These major observations include integrate our treasury system with our core banking solution; ensure completion of re-KYC of pending accounts with a particular focus on high-risk customers; ensure that KYC details of pending current and legacy accounts are uploaded to the Central Know Your Customer Registry within the defined timespan; implement an automated asset liability management system; implement system-level controls to ensure customers with a Basic Saving Bank Deposit account are restricted from opening another savings bank account with us; and ensure that our various forms for customers are printed in tri-lingual form and shall include the option of a third gender. Any significant deficiencies identified by the RBI in a final inspection report or other observations made that we are unable to rectify to the RBI's satisfaction could lead to sanctions and penalties being imposed by the RBI on our Bank, which could materially and adversely affect our reputation, business, financial condition, results of operations and cash flows.

7. Our business is significantly dependent on our business correspondents. Our business correspondents sourced or serviced 74.75%, 75.53%, 83.35% and 84.78% of our gross advances as at June 30,2023, and March 31,2023,2022 and 2021. Our income contributed by business correspondents represented 77.13%, 79.02%, 76.06%, 77.93% and 80.97% of our total income for the three months period ended June 30, 2023 and 2022 and Fiscals 2023, 2022 and 2021, respectively. If any of our business correspondents prefer to promote our competitors' loans over our loans or the agreements between us and them are terminated or not renewed, it would adversely affect our business, financial condition, results of operations and cash flows.

8. The attrition rate of our employees was 3.87% (not annualized), 5.66% (not annualized), 24.07%, 20.07% and 13.03% for the three months period ended June 30,2023 and 2022 and Fiscals 2023,2022 and 2021, respectively. If the attrition rate of our employees continues to increase our payments to and provisions for employees could increase, which could have an adverse effect on our financial condition, results of operations and cash flows.

9. The majority of our customers' complaints relate to (i) internet banking, mobile banking and electronic banking and (ii) transaction disputes related to withdrawal of cash from ATMs through ATM cards and disputes related to debit card transactions carried out at the merchant through point-of-sale machines. If we are unable to resolve our customers' complaints to their satisfaction, they may decide to no longer bank with us, which could have an adverse effect on our business, financial condition, results of operations and cash flows.

10. The gross proceeds of the Offer are up to ^4,630.00 million, which includes the gross proceeds of the Offer for Sale by the Selling Shareholders of up to ^723.00 million, which represents 15.62% of the gross proceeds of the Offer. Our Bank will not receive any proceeds from the Offer for Sale.

11. Average cost of acquisition of Equity Shares for the Selling Shareholders namely, ESAF Financial Holdings Private Limited is ^10.11, PNB MetLife India Insurance Company Limitedis ^40.07 and Bajaj Allianz Life Insurance Company Limited is ^40.07 and Offer Price at upper price Band is ^60.00.

12. Weighted average cost of acquisition of all Equity Shares transacted in one year, 18 months and three years preceding the date of the Red Herring Prospectus:

*As certified by A. John Moris & Co., Chartered Accountants pursuant to their certificate November 8,2023

13. Weighted average cost of acquisition compared to Floor Price and Cap Price:

*As certified by A. John Moris & Co., Chartered Accountants pursuant to their certificate dated November 8,2023

14. Market Capitalization to Revenue From Operations and total market valuation at floor and cap prices:

15. Weighted Average Return on Net Worth for Fiscals 2023,2022 & 2021 is 11.44%

16. The three BRLMs associated with the Offer have handled 74 public issues in the past three years, out of which 26 issues closed below the offer price on listing date.

The Offer has been made through the Book Building Process, in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules. 1957, as amended ("SCRR")read with Regulation 31 of the SEBIICDR Regulations and in compliance with Regulation 6(1) of the SEBIICDR Regulations, wherein not more than 50% of the Net Offer has been made available for allocation on a proportionate basis to Qualified Institutional Buyers ("QIBs", and such portion "QIB Portion''), provided that our Bank and the Promoter Selling Shareholder, in consultation with the BRLMs, allocated 60% of the QIB Portion to Anchor Investors on a discretionary basis ("Anchor Investor Portion"), of which one-third was reserved for domestic Mutual Funds, subject to valid Bids having been received from domestic Mutual Funds at or above the Anchor Investor Allocation Price in accordance with the SEBI ICDR Regulations. Further, 5% of the Net QIB Portion was made available for allocation on a proportionate basis only to Mutual Funds, and the remainder of the Net QIB Portion has been made available for allocation on a proportionate basis to all QIBs. including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. However, if the aggregate demand from Mutual Funds was less than 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion was added to the remaining Net QIB Portion for proportionate allocation to QIBs. Further, not less than 15% of the Net Offer has been made available for allocation to Non-lnstrtubonal Bidders, out of which (a) one third of such portion was reserved for Bidders with bids exceeding 70.20 million and up to 71.00 million; and (b) two third of such portion was reserved for Bidders with application size of more than 71.00 million, provided that the unsubscribed portion in either of such sub-categories was allocated to Bidders in the other sub-category of Non- Institutional Bidders, subject to valid Bids received at or above the Offer Price, and not less than 35% of the Net Offer has been made available for allocation to Retail Individual Bidders in accordance with the SEBI ICOR Regulations, subject to valid Bids having been received at or above the Offer Pnoe. Further, Equity Shares were allocated on a proportionate basis to Eligible Employees applying under the Employee Reservation Portion, subject to valid Bids received from them at or above the Offer Price. All potential Bidders (except Anchor Investors) were required to mandatory participate in the Offer through the Application Supported by Blocked Amount ("ASBA") process by providing details of their respective ASBA Account and UPI ID in case of UPI Bidders, if applicable, pursuant to which the corresponding Bid Amount was blocked by the Self Certified Syndicate Banks "SCSBs'') or the Sponsor Banks, as the case may be, to the extent of their respective Bid Amount Anchor Investors were not permitted to participate in the Offer through the ASBA process. For details, see "Offer Procedure' on pageof471 the Prospectus.

The bidding for Anchor Investor opened and closed on November 2,2023. The Bank received 14 applications from 11 Anchor Investors for 24.024.750 Equity Shares. The Anchor Investor Offer Price was finalized at 7 60 per Equity Share. A total of 22,524,998 Equity Shares were allocated under the Anchor Investor Portion aggregating toRs. 1,351.499.880 00/-. The Offer received 1,664,377 applications for 4,269,504,250 Equity Shares (including applications from Anchor Investors and prior to rejections) resulting in 55.19 times subscription. The details of the applications received in the Offer from Retail Individual Bidders, Non-institutional Bidders, QIBs and Eligible Employees bidding in the Employee Reservation Portion are as under (before rejections):

Final Demand

A summary of the final demand as per NSE and BSE as on the Bid,'Offer Closing Date at different Bid prices is as under

The Basis of Allotment was finalized in consultation with the Designated Stock Exchange, being BSE on November 8,2023.

A. Allotment to Retail Individual Bidders (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Retail I ndiwdual Bidders. who have bid at cut-off or at the Offer Price of 760 per Equity, was finalized in consultation with BSE. This category has been subscribed to the extent of 17.83 times after rejections. The total number of Equity Shares Allotted in Retail Individual Bidders category is 26,279.167 Equity Shares to 105,116 successful applicants. The category-wise details of the Basis of Allotment are as under:

B. Allotment to Non-lnstitutional Bidders (more than Rs. 0.20 million and upto Rs. 1 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstrtutional Bidders (more than Rs. 0.20 million and upto Rs. 1 million), who have bid at the Offer Price of Rs. 60 per Equity Share or above, was finalized in consultation with BSE, This category has been subscribed to the extent of 74 28 times (after rejections) The total number of Equity Shares allotted in this category is 3,754,167 Equity Shares to 1072 successful applicants, The category-wise details of the Basis of Allotment are as under;

C. Allotment to Non-lnstitutional Bidders (more than Rs.1 million) (After Rejections) (including ASBA Applications)

The Basis of Allotment to the Non-lnstitutional Bidders (more than Rs.1 million), who have bid at the Offer Price of Rs. 60 per Equity Share or above, was finalized in consultation with BSE. This category has been subscribed to the extent of 96 25 times (after rejections). The total number of Equity Shares allotted in this category s 7,508,333 Equity Shares to 2,105 successful applicants The category-wise details of the Basis of Allotment are as under: (Sample)

0. Allotment to Eligible Employees (after rejections) (including ASBA Applications)

The Basis of Allotment to the Eligible Employees, who have bid at the Offer Price (net of Employee Discount i.e. 155 per Equity Share orabove), was finalized in consultation with the BSE This category has been subscribed to the extent of 115 times on an overall basis (after rejections). The total number of Equity Shares Allotted in this category is 2,272,727 Equity Shares to 2,254 successful Eligible Employees The category-wise details of the Basis of Allotment are as under Eligible Employees below Rs. 0.20 million

E. Allotment to QIBs (Excluding Anchor Investors) (After Rejections)

Allotment to QIBs, who have bid at the Offer Pnce of Rs. 60 per Equity Share or above, has been done on a proportionate base In consultation with BSE. This category has been subscribed to the extent of 182.03 times of Net QIB portion. No application was received from Mutual Funds. The total number of Equity Shares allotted in the QIB category e 15,016,667 Equity Shares, which were allotted to 114 successful Applicants.

F. Allotment to Anchor Investors (After Rejections)

The Bank and the Promoter Seliin Shareholder, in consultation with the BRLMs, have allotted 22.524.998 Equity Shares to 11 Anchor Investors (through 14 Anchor Investor Application Forms) at an Anchor Investor Offer Price at Rs.60 per Equity Share in accordance with SEBIICDR Regulations This represents 60% of the Ql B portion.

The IPO Steering Committee of our Bank at its meeting held on November 9,2023 has taken on record the basis of allotment of Equity Shares approved by the Designated Stock Exchange, being BSE and has allotted the Equity Shares to various successful applicants. The Allotment Advice Cum Refund Intimation and/or nobces have been dispatched to the address of the investors as registered with the depositories Further, instructions to the SCSBs have been issued for unblocking of funds and transfer to the Public Offer Account on November 8,2023 and the payments to non-syndicate brokers have been issued on November 9,2023 In case the same is not received within ten days, investors may contact the Registrar to the Offer at the address given below. The Equity Shares allotted to the successful allottees have been uploaded on November 9, 2023 (or credit into the respective beneficiary accounts subject to validation of the account details with the depositories concerned. The Bank has filed the Listing application with NSE and BSE on November 9.2023. The Bank has received the listing and trading approval from NSE & BSE. and trading will commence on November 10,2023.

Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Prospectus.

These details of the Allotment made was hosted on the website of Registrar to the Offer, Link Intime India Private Limited at www.linkintime.co.ln.

All future correspondence in this regard may kindly be addressed to the Registrar to the Offer quoting full name of the First/ Sole applicant. Serial number of the Bid cum Application form number, Bidders DP ID, Client ID, PAN, date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares bid for, name of the Member of the Syndicate, place where the bid was submitted and payment details at the address given below:

	Link Intime India Private Limited
	C-101.1st Floor, 247 Park, Lai Bahadur Shastri Marg Vikhroli (West), Mumbai 400 083, Maharashtra, India
	Tel: +91 810811 4949: E-mail: esafipo@inkintime.co.in  Website: www.linkintime.co.in  Investor Grievance ID: esaf.ipo@linkmtime.co.in;
	Contact Person: Shanti Gopalknshnan. SEBI Registration Number: INR000004058

THE LEVEL OF SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING OR THE BUSINESS PROSPECTS OF ESAF SMALL FINANCE BANK LIMITED.

ESAF Small Finance Bank Limited has filed the Prospectus with RoC on Novembers. 2023. The Prospectus shall be avertable on the website of SEBI at www.sebi.gov.in, websites of the Stock Exchanges i e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com   and www.nseindia.com, respectively and is available on the websites of the BRLMs, i.e. ICICI Securities Limited at www.icicisecurities.com , DAM Capital Advisors Limited at www.damcapital.in and Nuvama Wealth Management Limited at www.nuvama.com and the website of the Bank at www.esafbank.com. Any potential investor should note that investment in equity shares involves a high degree of nsk and for details relating to such risks, please see the section tided 'Risk Factors' begining on page 35 of the Prospectus Potential investors should not rely on the Prospectus for making any investment decision This announcement has been prepared for publication in India and may not be released in the United States This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sokl in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Bank and that will contain detailed information about the Bank and management as well as financial statements. However, no public offering of securities is being made in the United States.