SBFC Finance shares crack 4% amid block deals; Kotak shares target price

Share of SBFC Finance dropped more than 4 per cent during the trading session on Tuesday amid the reported block deal by the promoters of the company.  According to the media reports, promoters of the shadow lenders were looking to offload more than 5 per cent stake of the company.

More than 6.82 crore shares of SBFC Finance, amounting to Rs 601.12 crore were traded on NSE as of 9.40 am on Tuesday. Similarly, 12.50 lakh equity shares of the non-banking finance company (NBFC) amounting to Rs 11.07 crore exchanged hands on BSE as of the same time.

The heavy volumes on both the exchanges- BSE and National Stock Exchange (NSE)- suggest that the block deal was executed. However, Business Today could not verify the same independently. Also the details of buyers and sellers are awaited so far, which will be announced by the exchanges later.

According to the reports, the block deal was done at a floor price of Rs 89 apiece, which is about a 3 per cent discount from the scrips' previous close of Rs 91.65. The stock tumbled more than 4.14 per cent to Rs 88 during the trading session Tuesday, with a total market capitalization of more than Rs 9,500 crore.

The promoter group of SBFC Finance held a 60.66 per cent stake in the lender as per its latest shareholding data. Eight45 Services, Arpwood Partners Investment Advisors, Arpwood Capital and SBFC Holdings are the four entities that make up the company's promoter group. Out of them, SBFC Holdings owns the biggest chunk of 55.21 per cent.

SBFC Finance reported a 71.73 per cent rise in net profit on a YoY basis to Rs 73.43 crore in the quarter ended March 2024 as against Rs 42.76 crore during the previous quarter ended March 2023. Sales for the quarter grew 34.76 per cent to Rs 272.02 crore in the quarter ended March 2024 as against Rs 201.86 crore during the previous quarter ended March 2023.

High growth, stable spreads and asset quality performance summarize SBFC’s 4QFY24 performance. Incrementally, liability-side pressure, moderation in demand and volatility in gold prices are monitorable, though the company seems to be navigating well, said Kotak Institutional Equities, retaining its 'reduce' rating on the stock on the back of  full valuations with a fair value of Rs 90.

Shares of SBFC Finance were listed at the bourses in August 2023 when the company raised a total of Rs 1,025 crore via IPO route and sold its shares of Rs 57 apiece. The stock is up about 60 per cent from its issue price so far. SBFC provides its services in the form of secured MSME Loans and loans against gold.