Utkarsh Small Finance Bank IPO subscribed 10.1 times so far on Day 2. Check GMP and other details

economictimes.indiatimes.com:

The retail portion of the IPO was subscribed 26.6 times, while that of NIIs was subscribed 16.58 times. The subscription for the QIB category, which was muted on Day 1, stood at 1.45 times on Day 2. According to market sources, the grey market premium (GMP) of Utkarsh SFB rose marginally from the previous day to Rs 17.

Analysts advised investors to subscribe to the issue for the long-term strong loan portfolio and lowest cost-to-income ratio. At the upper price band, the company is valued at a P/B of 1.39x, with a market cap of Rs 2,740 crore post issue of equity shares and a return on net worth of 20.22%. Incorporated in 2016, Utkarsh commenced operations in 2017 and its product suite includes a range of deposit products, including saving accounts, salary accounts, current accounts, recurring and fixed deposits, and locker facilities.

While the top-line has remained healthy, reporting a CAGR of 26% over FY21-23, there was muted growth in FY22 in the bottom lines following the general market trends after the pandemic. Its net NPAs were at 1.33%, 2.31%, and 0.39% for FY21, FY22, and FY23, respectively. The bank recorded the third fastest gross loan portfolio growth between fiscal 2019 and fiscal 2023 among peers with a gross loan portfolio of more than Rs 6,000 crore.

For the year ending March 2023, the company recorded a total income of 2,804 crore, while net profit for the same period stood at Rs 404 crore. Proceeds from the fresh issue will be utilised to augment the lender's Tier 1 capital base to meet future capital requirements. ICICI Securities and Kotak Mahindra Capital Company are the book-running lead managers to the issue.