SBFC Finance IPO subscribed 18.26 times on day 3 so far, QIB & NIIs lead the bidding
The initial public offering (IPO) of SBFC Finance will open for subscription on Thursday, August 3 and the issue can be subscribed till Monday, August 7, 2023.
- Aug 7, 2023,
- Updated Aug 7, 2023 1:36 PM IST
The Rs 1,025-crore initial public offering (IPO) of SBFC Finance continued to witness a strong demand from the investors during the third and last day of the bidding process, led by qualified institutional bidders and non-institutional investors. The issue was booked 7.52 times on the final day of the bidding.
SBFC Finance is selling its shares in the range of Rs 54-57 apiece during the three-day bidding process and investors can make a bid of a minimum of 260 equity shares and its multiples thereafter. The issue includes a sale of fresh equity shares worth Rs 600 crore and an offer-for-sale of around Rs 425 crore.
According to the data from BSE, the investors made bids for 2,43,78,16,160 equity shares, or 18.26 times, compared to the 13,35,12,817 equity shares offered for the subscription by 1.15 pm on Monday, August 5, 2023. The issue opened on Thursday, August 4.
The quota for non-institutional investors was booked 32.35 times, whereas the allocation for qualified institutional bidders (QIBs) fetched 25.38 times subscription as of the same time. The portion of retail bidders and employees was booked 8.45 times and 4.48 times, respectively.
Incorporated in 2008, SBFC Finance is a non-banking finance company which provides secured MSME loans and loans against gold primarily to entrepreneurs, small business owners, self-employed individuals, and salaried and working-class individuals. The company has an extensive pan-India network in over 157 Branches in 105 cities in 16 states and two union territories.
Majority of the brokerage firms are positive on the issue, suggesting investors to subscribe to the issue citing its pan India network, strong return ratios, superior business model and lower cost of funds. However, they have also flagged risks of higher valuations and rate sensitive factors as the key risks for the company.
At the upper price band, SBFC Finance is valued at 2.6 times P/Bv. The issue is priced effectively and is having the lowest P/B times amongst its listed peer set. Keeping in mind the under-penetration in the segment it operates and the loan growth potential of 18-20 per cent for FY23-FY26E, said IndSec Securities with a 'subscribe' rating on the issue.
Ahead of its IPO, SBFC Finance has raised Rs 304.42 crore by allocation of 5.34 crore equity shares to 37 anchor investors at a price of Rs 57 per share, a BSE circular said. Abu Dhabi Investment Authority, Amansa Holdings, Neuberger Berman, Ashoka India, Steadview Capital Master Fund, Carmignac Portfolio, Think India Opportunities and Natixis International were the marquee investors that participated in the anchor book.
Considering the FY23 BVPS of Rs 21.87 on a post-issue basis, the company is going to list at a P/B of 2.61 times with a market cap of Rs 6,065.8 crore whereas its peers namely Aavas Financiers, Home First Finance and AU Small Finance Bank are trading at P/B of 3.80 times, 4.23 times, and 4.40 times, respectively, said Marwadi Financial Services.
"We assign a 'Subscribe' rating to this IPO, given the company's diversified pan-India presence, robust network to target customers, 100 per cent. in-house sourcing, and favorable valuation compared to peers," it added. ICICI Securities, Axis Capital and Kotak Mahindra Capital Company are the lead managers to the issue, while KFin Technologies has been appointed as the registrar to the issue. Shares of the company will be listed on both NSE and BSE with Wednesday, August 16 as the tentative date of listing.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
Also read: Hot stocks on August 7, 2023: Zomato, Paytm, IRFC, Adani Green, Grasim and more
Also read: Why are SBI shares falling post Q1 results. Should you buy, hold or sell this PSU bank stock?
The Rs 1,025-crore initial public offering (IPO) of SBFC Finance continued to witness a strong demand from the investors during the third and last day of the bidding process, led by qualified institutional bidders and non-institutional investors. The issue was booked 7.52 times on the final day of the bidding.
SBFC Finance is selling its shares in the range of Rs 54-57 apiece during the three-day bidding process and investors can make a bid of a minimum of 260 equity shares and its multiples thereafter. The issue includes a sale of fresh equity shares worth Rs 600 crore and an offer-for-sale of around Rs 425 crore.
According to the data from BSE, the investors made bids for 2,43,78,16,160 equity shares, or 18.26 times, compared to the 13,35,12,817 equity shares offered for the subscription by 1.15 pm on Monday, August 5, 2023. The issue opened on Thursday, August 4.
The quota for non-institutional investors was booked 32.35 times, whereas the allocation for qualified institutional bidders (QIBs) fetched 25.38 times subscription as of the same time. The portion of retail bidders and employees was booked 8.45 times and 4.48 times, respectively.
Incorporated in 2008, SBFC Finance is a non-banking finance company which provides secured MSME loans and loans against gold primarily to entrepreneurs, small business owners, self-employed individuals, and salaried and working-class individuals. The company has an extensive pan-India network in over 157 Branches in 105 cities in 16 states and two union territories.
Majority of the brokerage firms are positive on the issue, suggesting investors to subscribe to the issue citing its pan India network, strong return ratios, superior business model and lower cost of funds. However, they have also flagged risks of higher valuations and rate sensitive factors as the key risks for the company.
At the upper price band, SBFC Finance is valued at 2.6 times P/Bv. The issue is priced effectively and is having the lowest P/B times amongst its listed peer set. Keeping in mind the under-penetration in the segment it operates and the loan growth potential of 18-20 per cent for FY23-FY26E, said IndSec Securities with a 'subscribe' rating on the issue.
Ahead of its IPO, SBFC Finance has raised Rs 304.42 crore by allocation of 5.34 crore equity shares to 37 anchor investors at a price of Rs 57 per share, a BSE circular said. Abu Dhabi Investment Authority, Amansa Holdings, Neuberger Berman, Ashoka India, Steadview Capital Master Fund, Carmignac Portfolio, Think India Opportunities and Natixis International were the marquee investors that participated in the anchor book.
Considering the FY23 BVPS of Rs 21.87 on a post-issue basis, the company is going to list at a P/B of 2.61 times with a market cap of Rs 6,065.8 crore whereas its peers namely Aavas Financiers, Home First Finance and AU Small Finance Bank are trading at P/B of 3.80 times, 4.23 times, and 4.40 times, respectively, said Marwadi Financial Services.
"We assign a 'Subscribe' rating to this IPO, given the company's diversified pan-India presence, robust network to target customers, 100 per cent. in-house sourcing, and favorable valuation compared to peers," it added. ICICI Securities, Axis Capital and Kotak Mahindra Capital Company are the lead managers to the issue, while KFin Technologies has been appointed as the registrar to the issue. Shares of the company will be listed on both NSE and BSE with Wednesday, August 16 as the tentative date of listing.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)
Also read: Hot stocks on August 7, 2023: Zomato, Paytm, IRFC, Adani Green, Grasim and more
Also read: Why are SBI shares falling post Q1 results. Should you buy, hold or sell this PSU bank stock?