Laxmi India Finance IPO opens today: Should you subscribe to it?

The initial public offering (IPO) of Laxmi India Finance  kicks-off for bidding on Tuesday, July 29. The shadow lender is offering its shares in the range of Rs 150-158 apiece. Investors can apply for a minimum of 94 equity shares and its multiples thereafter. The IPO closes for bidding on Thursday, July 31.

Laxmi India Finance is looking to raise a total of Rs 254.26 crore via its IPO, which includes a fresh share sale of Rs 165.17 and an offer-for-sale (OFS) of up to 56,38,620 equity shares worth Rs 89.09 crore. The net proceeds from the issue shall be utilized towards augmentation of the capital base to meet the future capital requirements and general corporate purposes.

Incorporated in 1996, Laxmi India Finance is engaged in the business of offering MSME loans, vehicle loans, construction loans, and other lending products, supporting small businesses and entrepreneurs, with over 80 per cent of MSME loans qualifying as priority sector lending.

Laxmi India Finance raised Rs 75.5 crore from anchor investors as it allocated 47.79 lakh shares at Rs 158 apiece. Its anchor book included names like Saint Capital Fund, BNP Paribas Financial Markets -- ODI, Compact Structure Fund, Cognizant Capital Dynamic Opportunities Fund, India Max Investment Fund, Holani Venture Capital Fund-I and Rajasthan Global Securities.

For the year ended on March 31, 2025, Laxmi India Finance reported a net profit of Rs 36.01 crore with a revenue of Rs 248.04 crore. The company clocked a net profit of Rs 22.47 crore with a revenue of Rs 175.02 crore for the financial year ended on March 31, 2025. The company shall command a net profit of close to Rs 825.83 crore.

The company has reserved 50 per cent of the net offer for the qualified institutional bidders, while non-institutional investors will have 15 per cent of the offer allocated for them. Retail investors will have 35 per cent of the reservation in the IPO. The company was commanding a grey market premium (GMP) of Rs 9-10 per share, suggesting 6 per cent gains for the investors.

PL Capital Markets is the book-running lead manager of the Laxmi India Finance IPO, while MUFG Intime India (Link Intime) is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Tuesday, August 5. Here's what a host of brokerage firms said about the IPO of Laxmi India Finance:  

Arihant Capital Markets Rating: Subscribe The overall outlook for Laxmi India Finance International Limited is positive, driven by strong financial performance. It's one of the fastest-growing players in terms of AUM, witnessing a 32.83 per cent year-on-year growth in FY25, and demonstrates strong financial health with a low GNPA of 1.07 per cent and NNPA of 0.48 per cent for the same period, said SBI Securities.

"This upcoming public offering presents a compelling opportunity for investors to engage with a financially sound and strategically positioned NBFC, backed by diversified funding from 47 lenders and a strong capital adequacy ratio of 20.80 per cent. The issue is valued at a P/BV ratio of 3.21, based on a FY25 BV/ share of Rs 49.26," it added with a 'subscribe for long-term' rating.  

SBI Securities Rating: Subscribe with caution Laxmi India Finance continued discipline in credit underwriting and a calibrated approach to scaling make it an attractive small-size NBFC play in the expanding MSME credit opportunity. The company’s credit rating has improved to ‘A-’ from ‘BBB+’ in FY22, said SBI Securities.

"The issue is attractively valued at FY25 P/BV of 2 times. We recommend investors to 'subscribe' to the issue at cut-off price, however looking at the relatively smaller scale of business, investors should note that it will fit in a high risk, high-return investment matrix," it added.  

Swastika Investmart Rating: Subscribe with Caution Laxmi India Finance’s primary business revolves around lending, providing structured financial solutions to segments that are typically overlooked by mainstream banks. The business operates within an intensely competitive marketplace. Current financial indicators suggest that the offering is priced on the fair side, said Swastika with a 'subscribe with caution' rating for investors.  

Canara Bank Securities Rating: Subscribe Laxmi India Finance has had robust financial performance for the past three years. The issue is overpriced at 2.57 times PB, whereas the listed peers on average are available at 2.02 times PB. It is well positioned to take advantage of the MSME surge in India, as of now the company is present only in 5 states with a major presence (80 per cent) in Rajasthan, said Canara Bank Securities, with a 'subscribe' rating.  

SMIFS Rating: Subscribe Laxmi India Finance sustaining strong growth, asset quality, and profitability, but continued focus on risk management will be crucial as the company pursues further scale, said SMIFS. "We recommend to subscribe to the issue as a long term investment due to a strong management, securitised book and healthy growth rates driven by geographical expansion and cross selling opportunities," it said.  

Marwadi Financial Services Rating: Subscribe "We assign a 'subscribe' rating to this IPO as the company has a strong focus on MSME financing and operates with a Hub and Branch model that enhances operational efficiency, reduces costs, and improves customer outreach, said Marwadi Financial Services. "Also, it is available at reasonable valuation as compared to its peers," it said.  

Ventura Securities Rating: Subscribe Laxmi India Finance aims to further expand its footprint in existing and new geographies, enhance digital capabilities for loan servicing and underwriting, and diversify its product mix to include new-age lending solutions. The company is also exploring opportunities to deepen its SME financing and cross-sell insurance and other financial products, said Ventura with a 'subscribe' rating.