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Details about the SBFC Finance initial public offering (IPO): The IPO for the SBFC Finance began accepting subscriptions on August 3 and will end on August 7. The planned initial public offering’s price range for equity shares has been set by SBFC Finance IPO at 54 to 57. Lot sizes for the SBFC Finance IPO start at 260 equity shares and go up in multiples of 260 equity shares.
The anchor investors contributed 304.4 crore to the SBFC Finance IPO on Wednesday.Abu Dhabi Investment Authority, Carmignac Portfolio, Axis Mutual Fund, Birla Mutual Fund, Loomis Sayles, and Neuberger Berman are just a few of the names on the list of anchor investors. Existing investors ICICI MF, SBI MF, HDFC MF, Amansa, Malabar, and Steadview Capital participated in the offer along with the anchor list.
2,23,08,260 equity shares were distributed to 10 domestic mutual funds via a total of 18 schemes for a total of 127.15 crore, or 42% of the anchor book size, out of the total 5,34,07,893 equity shares that were awarded to the anchor investors.
According to the Red Herring Prospectus (RHP), the SBFC Finance IPO consists of a new issue of equity shares worth 600 crore and an offer for sale (OFS) of 425 crore. SBFC Finance’s initial public offering now has a 1,025 crore total offer size.
According to the red herring prospectus (RHP), SBFC Finance plans to use the net proceeds to cover future capital needs that are expected to arise from the development of their business’s activities and assets.
Today, SBFC Finance IPO GMP
On the second day of bidding (August 4), the SBFC Finance IPO’s GMP (grey market premium) is +40, which is the same as the session before it when it was +39. According to topsharebrokers.com, this suggests that SBFC Finance’s share price was selling at a premium of 40 on Friday on the black market.
The estimated listing price of SBFC Finance share price is 96 per each, which is 68.42% more than the IPO price, taking into account the top end of the IPO pricing band and the existing premium on the grey market.
Investors that are willing to pay more than the issue price are said to have a “grey market premium.”
Status of IPO subscriptions for SBFC Finance
On August 4, the second day of the bidding process, SBFC Finance IPO subscription status was 6.67 times. In comparison to the issue size of 13.35 crore shares, bids for the public offering totaled 84.40 crore shares.
In the retail sector, SBFC Finance’s initial public offering (IPO) received 5,010 subscriptions, while qualified institutional buyers (QIBs) received 4,710 subscriptions. Up to 4:45 pm, 13.25 bookings were made for Non-Institutional Investors (NII).
SBFC Finance IPO: Should I purchase it or not?, according to brokerages
The stock is priced at 2.4(x) P/BVPS with a current book value per share of 23 at the highest price band (57). We think SBFC Finance Limited is worth subscribing given the exceptional return ratio, FY23 ROA of around 3%, and additional improvement following the capital increase. We thus advise ‘Subscribe’,” the brokerage wrote in its report.
Choice Equity Broking Pvt Ltd.
Given the numerous development prospects in the MSME category and appropriate capital, the brokerage expects SBFC Finance to maintain its excellent growth trajectory. A fresh offer of 600 crore will also help to increase capital adequacy. However, increasing rivalry in the self-employed and secured MSME segments, the high risk character of targeted segments, geographical risk, and economic uncertainty are the main business hazards.
“At the highest price band of Rs. 57, desired value at Rs. 6,066 crore is generated at P/BV of 2.5x on post issues trailing BV basis (after considering fresh issue process), which looks on the high side. The counterparts mentioned in RHP are primarily affordable housing financing firms, which make it difficult to do an apples-to-apples comparison. Ugro Capital, which does comparable business to SBFC Finance, is now trading at a P/BV of 1.9x. Therefore, taking into account the aforementioned factors, we rate the issue as “Subscribe with Caution,” the brokerage wrote in its analysis.
The SBICAP Securities Ltd.
According to post-issue capital, SBFC Finance is valued at 2.5x/2.6x of its FY23 book value at the lower/upper price band of 54/57. When comparing the stock to its immediate competitors on comparable valuation criteria, the company is properly priced. For listing gains at a CUT-OFF price, we advise investors to subscribe to the IPO, the brokerage stated in its research.