Utkarsh Small Finance Bank IPO sails through in just two hours; Retail portion books 3.75x
The issue of Utkarsh Small Finance Bank is entirely a fresh sale of 20 crore equity shares amounting to Rs 500 crore with a bid of a minimum of 600 equity shares and its multiples thereafter.
- Jul 12, 2023,
- Updated Jul 12, 2023 12:20 PM IST
The Rs 500-crore initial public offering (IPO) of Utkarsh Small Finance Bank (SFB) saw a strong demand from the investors on the first day of the bidding. The issue sailed through in just two hours of bidding, thanks to strong demand from retail and HNI bidders. Utkarsh Small Finance Bank is selling its shares in the range of Rs 23-25 apiece during the three-day bidding process, which concludes on Friday, July 14. The issue is entirely a fresh sale of 20 crore equity shares and investors can make a bid of a minimum of 600 equity shares and its multiples thereafter. According to the data from the BSE, the investors made bids for 12,09,21,000 equity shares, or 100 per cent, compared to the 12,05,43,477, equity shares offered for the subscription by 12.01 pm on Wednesday, July 12, 2023. The quota for retail investors was booked 3.75 times, whereas the allocation for non-institutional bidders (NIIs) fetched 1.21 times bids. The portion for employees was subscribed 46 per cent, while qualified institutional bidders' allocation was not even off the mark as of the same time.
Incorporated in 2016, Utkarsh Small Finance Bank is a small finance bank in India, which recorded the second fastest AUM growth in the years financial year 2018-19 and financial year 2021-2022. The private lender has an asset under management (AUM) of more than 6,000 crore. Varanasi-headquartered Utkarsh Small Finance Bank has operations across 26 states and Union Territories with 830 banking outlets and 15,424 employees as of March 31, 2023. It had a 3.59 million customer base majorly located in rural and semi-urban areas primarily in Bihar and Uttar Pradesh. Majority of the brokerage firms are positive on the issue and suggest subscribing to it on a long-term basis, citing its attractive pricing, strong balance sheet and sound business fundamentals. However, a select analyst has flagged geographical concentration as the key threat to its business. Utkarsh SFB, at the upper price band is valued at 1.1 times of its FY23 book on post-issue capital. While compared with its close peers on similar valuation parameters, the issue is fairly priced. We recommend investors to subscribe the IPO for listing, said SBICap Securities. The SFB has a history of instances of delays in making certain disclosures and regulatory filings to BSE under the Listing Regulations (for non-convertible debentures), alleged non-compliance with provisions of the Companies Act 2013 and any penal action in this regard may impact its credentials, cautioned Ashika Stock Broking, which also finds its valuations attractive. A day ahead of its IPO, Utkarsh SFB allocated 8.91 crore equity shares to 20 anchor investors at an issue price of Rs 25 apiece to garner Rs 222.75 crore. SBI Mutual Fund, ICICI Prudential, Kotak Mahindra Trustee, Aditya Birla Sun Life Trustee, Goldman Sachs, SBI Life Insurance, Edelweiss Trusteeship, Founders Collective Fund and AG Dynamics Funds participated in the anchor book.
Utkarsh SFB appears reasonably priced compared to peers. Considering its resilient performance post COVID, consistent growth in loan book and deposits, healthy return ratios, best cost to income ratio, pan India presence and promising industry outlook, we assign a 'subscribe' rating on a short to medium term basis, said Geojit Financial Services. ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers to the issue, while Kfin Technologies has been appointed as the registrar to the issue. Shares of the lender will be listed on both BSE and NSE with July 24 (Monday) 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)
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The Rs 500-crore initial public offering (IPO) of Utkarsh Small Finance Bank (SFB) saw a strong demand from the investors on the first day of the bidding. The issue sailed through in just two hours of bidding, thanks to strong demand from retail and HNI bidders. Utkarsh Small Finance Bank is selling its shares in the range of Rs 23-25 apiece during the three-day bidding process, which concludes on Friday, July 14. The issue is entirely a fresh sale of 20 crore equity shares and investors can make a bid of a minimum of 600 equity shares and its multiples thereafter. According to the data from the BSE, the investors made bids for 12,09,21,000 equity shares, or 100 per cent, compared to the 12,05,43,477, equity shares offered for the subscription by 12.01 pm on Wednesday, July 12, 2023. The quota for retail investors was booked 3.75 times, whereas the allocation for non-institutional bidders (NIIs) fetched 1.21 times bids. The portion for employees was subscribed 46 per cent, while qualified institutional bidders' allocation was not even off the mark as of the same time.
Incorporated in 2016, Utkarsh Small Finance Bank is a small finance bank in India, which recorded the second fastest AUM growth in the years financial year 2018-19 and financial year 2021-2022. The private lender has an asset under management (AUM) of more than 6,000 crore. Varanasi-headquartered Utkarsh Small Finance Bank has operations across 26 states and Union Territories with 830 banking outlets and 15,424 employees as of March 31, 2023. It had a 3.59 million customer base majorly located in rural and semi-urban areas primarily in Bihar and Uttar Pradesh. Majority of the brokerage firms are positive on the issue and suggest subscribing to it on a long-term basis, citing its attractive pricing, strong balance sheet and sound business fundamentals. However, a select analyst has flagged geographical concentration as the key threat to its business. Utkarsh SFB, at the upper price band is valued at 1.1 times of its FY23 book on post-issue capital. While compared with its close peers on similar valuation parameters, the issue is fairly priced. We recommend investors to subscribe the IPO for listing, said SBICap Securities. The SFB has a history of instances of delays in making certain disclosures and regulatory filings to BSE under the Listing Regulations (for non-convertible debentures), alleged non-compliance with provisions of the Companies Act 2013 and any penal action in this regard may impact its credentials, cautioned Ashika Stock Broking, which also finds its valuations attractive. A day ahead of its IPO, Utkarsh SFB allocated 8.91 crore equity shares to 20 anchor investors at an issue price of Rs 25 apiece to garner Rs 222.75 crore. SBI Mutual Fund, ICICI Prudential, Kotak Mahindra Trustee, Aditya Birla Sun Life Trustee, Goldman Sachs, SBI Life Insurance, Edelweiss Trusteeship, Founders Collective Fund and AG Dynamics Funds participated in the anchor book.
Utkarsh SFB appears reasonably priced compared to peers. Considering its resilient performance post COVID, consistent growth in loan book and deposits, healthy return ratios, best cost to income ratio, pan India presence and promising industry outlook, we assign a 'subscribe' rating on a short to medium term basis, said Geojit Financial Services. ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers to the issue, while Kfin Technologies has been appointed as the registrar to the issue. Shares of the lender will be listed on both BSE and NSE with July 24 (Monday) 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 July 12, 2023: Adani Enterprises, Delta Corp, Suzlon Energy, Wipro and more
Also read: RIL, ICICI Bank among shares that MFs bought in June; Tata Motors stock on sell radar