Trading below IPO price, 3 brokerages initiate coverage on Fedbank Financial Services with ‘buy’, sees up to 47% upside
Federal Bank arm Fedbank Financial Services (FedFina) is currently trading below its IPO price of ₹140, three brokerages have initiated coverage on the NBFC stock with buy calls and sees an upside potential of up to 47 percent. Currently trading at ₹125, FedFina is down almost 11 percent from its issue price. The stock witnessed a weak debut and was listed on the bourses at ₹137.7 on November 30.
The stock has gained around 5 percent in March so far, snapping 3 months of losses. It fell 9 percent in February 2024, 3.5 percent in January 2024 and 3 percent in December 2023. The stock is currently 18.5 percent away from its record high of ₹153.50, hit on December 15, 2023.
Meanwhile, it has advanced over 6 percent from its 52-week low of ₹117.70, hit on February 29, 2024. The ₹1,092.26 crore IPO was open subscription between November 22-24 at a price band in the range of ₹133-140. Fedbank Financial Services IPO was subscribed 2.24 times.
The public issue subscribed 1.88 times in the retail category, 3.48 times in QIB, and 1.49 times in the NII category by November 24, 2023 (Day 3). The IPO consisted of fresh issue of equity shares up to the value of ₹600 crore and an offer-for-sale (OFS) of up to 35,161,723 equity shares by the promoters. As per the RHP, the company planned to use the net proceeds from the new issue, to increase its Tier-I capital base in order to meet future capital requirements that will arise from the expansion of its assets and business.
Additionally, a portion of the new issue's proceeds will go towards covering offer expenses. FedBank Financial Services reported a 27.8 percent YoY rise in its net profit to ₹65.4 crore in the October-December quarter of financial year 2023-24. The company had earned
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