SBFC Finance IPO subscribed 3.61 times so far on Day 2. Check GMP and other details
The retail portion of the IPO was subscribed 3.67 times and the NII category was booked 7.7 times. The part reserved for qualified institutional buyers (QIB) was subscribed just 52% so far. According to market sources, the company's shares are commanding a premium of 38% in the unlisted market.
Analysts gave a mixed verdict, staying cautious on IPO with probable pressure on margins, profitability, and rising risk of defaults. At the upper price band of Rs 57 per share, the stock is valued at 3x P/BV trailing FY23 book. SBFC Finance is a non-deposit-taking, non-banking financial company offering loans including secured MSME loans and loans against gold.
The IPO, which comprises fresh equity issues of up to Rs 600 crore and an offer for sale (OFS) of up to Rs 425 crore, is priced in the range of Rs 54-57 per share. At the higher price band, analysts value the stock at 2.4x P/BVPS with a current book value per share of Rs 23. Investors can bid for a minimum of 260 shares and in multiples thereafter.
About 50% of the offer is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NII), and the rest 35% for retail investors. The proceeds from the fresh issuance worth Rs 600 crore will be used to boost its capital base to meet future capital requirements. For the year ending March 2023, the company's revenues were Rs 740 crore.
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