In Wednesday's session, shares of SBFC Finance were priced at a significant premium of 43.8%. The stock began trading on the NSE for Rs 82, over the IPO price of Rs 57 per share. In the meantime, it was listed on BSE for Rs 81.99 per share.
The shares of the company were exchanged at a premium of Rs 26 before the listing in the unlisted marketplace.
The IPO or initial public offer of SBFC Finance was massively oversold at closure, driven by the strong institutional response. The final day of investor bids was Monday.
Following non-institutional investors (49 times) and retail investors (almost 11 times), the QIB portion of the IPO was heavily subscribed (192 times).
Priced between Rs. 54 and Rs. 57 per share, the IPO included a fresh equity issue of up to Rs. 600 crore including an offer for sale (OFS) of up to Rs. 425 crore.
Analysts consider the stock at 2.4x P/BVPS at the highest price band, given a current book value per share of Rs 23.
To increase its capital base and fulfill future capital requirements, the revenues from the new offering, worth Rs 600 crore, would be used.
A non-deposit-taking, non-banking financial institution called SBFC Finance provides loans, including secured loans for MSME businesses and loans backed by gold.
The presence across all of India, internal sourcing, and a thorough structure for credit evaluation, underwriting, and risk management are some of its significant competitive advantages.
Despite financial constraints, the company's margin increased from 7% in FY21 to 7.7% in FY23 as a result of effective loan re-pricing and an enhanced rating profile that controlled the cost of funds.
The company's revenue for the financial year concluding in March 2023 was Rs 740 crore. It made Rs 149.7 crore in profit throughout the period.
The offer's registrant was KFin Technologies, and the book-running lead managers were ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company.
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