SBFC Finance shares have been listed at a premium of 43.8% on both the exchange houses in Wednesday’s trading session. The stock made its debut at Rs 82 on NSE and Rs 81.99 on BSE, over the IPO price of Rs 57 per piece.
Ahead of its listing on Wednesday, the shares of the company were trading at a premium of Rs 26 in the unlisted market.
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The non-banking finance company saw a strong demand from institutional investors, and was subscribed by a massive 70.16 times at close. Qualified institutional buyers (QIBs) had taken the lead amongst investors, buying 192.89 times the portion set aside for them and the high net-worth individuals had bid 49.09 times the reserved portion. The parts allotted for retail investors and employees were subscribed 10.99 times and 5.87 times, respectively.
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. Most analysts had a positive view of the IPO and gave the ‘subscribe’ tag to the issue.
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Brokerage firm Choice Broking was quoted as saying, “At the higher price band of Rs 57, demanded valuation at Rs 6,066 crore is derived at P/BV (price-to-book-value) of 2.5x on post issues trailing BV basis (after considering fresh issue proceed) which seems on the higher side. Mentioned peers in RHP are mainly affordable housing finance companies that can’t be compared on an apple- to-apple basis. Meanwhile, Ugro Capital, having a similar business to SBFC, is currently trading at a P/BV of 1.9x. Thus considering the above parameters, we assign ‘subscribe with caution’ rating to the issue.”
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The fresh issue proceeds worth Rs 600 crore will be used to boost its capital base to meet future capital requirements. ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company acted as the book-running lead managers and KFin Technologies was the registrar of the offer.
For the year ending March 2023, the company reported revenues at Rs 740 crore. The profit for the period was Rs 149.7 crore. It has a footprint in over 120 cities with 152 branches in India, focusing more on loans with ticket sizes in the range of Rs 5 lakh to Rs 30 lakh, accounting for over 87% of its total assets under management in FY23.