SBFC Finance shares list at robust premium of 44% over IPO price
SBFC Finance listed at a robust premium of 43.8% on the exchanges in Wednesday's trade. The stock debuted at Rs 82 on NSE over the IPO price of Rs 57 apiece. Meanwhile, on BSE it listed at Rs 81.99 per share.
Ahead of the listing, the company's shares traded at a premium of Rs 26 in the unlisted market. Led by the robust institutional response, the initial public offer (IPO) of SBFC Finance was subscribed by a massive 70.16 times at close. Monday was the last day of bidding for investors.
The QIB portion of the IPO was subscribed by an overwhelming 192 times, followed by non-institutional investors at 49 times and retail investors at nearly 11 times. The IPO, which comprised fresh equity issue of up to Rs 600 crore and an offer for sale (OFS) of up to Rs 425 crore, was 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.
The proceeds from the fresh issuance worth Rs 600 crore will be used to boost its capital base to meet future capital requirements. SBFC Finance is a non-deposit-taking, non-banking financial company offering loans including secured MSME loans and loans against gold. The key competitive strengths include its pan-India presence, in-house sourcing, and comprehensive credit assessment, underwriting, and risk management framework.
The company has witnessed spread expansion from 7% in FY21 to 7.7% in FY23 despite monetary tightening due to effective re-pricing of loans as well as improved rating profile which has kept the cost of funds under check. For the year ending March 2023, the company's revenues were Rs 740 crore. The profit for the period was Rs 149.7 crore.
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