ESAF Small Finance Bank makes a healthy D-Street debut. What investors should do
ESAF Small Finance Bank debuted with a premium listing of nearly 20% on Friday. The listing was in line with expectations, following a strong response to the IPO.
The public offer was subscribed by a massive 73 times at close on strong demand from institutional investors.
The QIB category of the IPO was booked 173 times.
Analysts are mixed on the post-listing strategy for investors, but they agree that the company is well-placed to capture growth in the industry.
«The company has reported strong growth in top- and bottom-line numbers. Allottees are advised to maintain their stop loss at Rs 60 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock,» said Shivani Nyati, Head of Wealth, Swastika Investmart.
ESAF SFB is focussed on unbanked and under-banked customer segments, especially in rural and semi-urban areas.
The AUM grew from Rs 8,426 crore to Rs 16,320 crore from FY21-23, registering a CAGR of 39.22%, which was the highest among peers.
Its asset products include micro-loans, retail loans, MSME loans, loans to financial institutions, and agricultural loans. As of March 2023, 62.84% of the lender's gross advances were directed towards customers in rural and semi-urban areas, and 71.71% of their banking outlets were located in these regions.
«We believe the premium listing is justified on the back of investor friendly pricing and reasonable IPO valuations when compared to peers.
