Akme Fintrade IPO opens. Should you subscribe to the issue?
Akme Fintrade's Rs 132 crore initial public offer (IPO) opened for subscription on Wednesday. The issue, which closes on June 21, is completely a fresh equity sale of 1.1 crore shares.
The funds are being raised primarily to augment its capital base. As per RBI norms, the minimum capital adequacy for an NBFC should be 15%.
“As we continue to grow our loan portfolio and asset base, we will require additional capital in order to continue to meet applicable capital adequacy ratios with respect to our business,” the company said.
In the coming years, the company plans to grow its loan advances which would require tier-1 capital to comply with the applicable capital adequacy regulations. Through the IPO, it would have adequate capital without any further need of fresh capital in the short to medium term.
Akme Fintrade IPO review
Given that the domestic NBFC sector is very competitive, analysts advised investors to take a cautious approach to the IPO even though the grey market trends indicate high demand.
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«We are cautious about Akme Fintrade IPO as the inherent risks outweigh the potential benefits for most investors. Thus, we assign a neutral rating to the public offer,» said Swastika Investmart.
Akme Fintrade IPO price band
The IPO is priced in the range of Rs 114-120 per share, where investors can bid for 125 shares in one lot. At the upper end, the company plans to raise Rs 132 crore through the issue.
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