SBFC Finance IPO: SBFC Finance shares listed at 44% premium over IPO price on NSE and BSE amid positive domestic market. The share debuted at Rs 82 apiece on the BSE, as compared to the issue price of Rs 57. A positive listing was expected as ahead of the market debut, SBFC Finance shares were trading at a premium of Rs 30 in the grey market.
The IPO consisted of a fresh issue of equity shares worth up to Rs 600 crore and an offer-for-sale (OFS) component of up to Rs 425 crore by existing shareholders. The company intended to use the net proceeds from the IPO to bolster its capital base, catering to its future capital requirements resulting from business and asset growth. For potential investors, the bidding started at a minimum of 260 equity shares, with subsequent bids in multiples of 260 equity shares.The price band for the issue was Rs 54-57 per share.
“There has been credit growth in non-metro cities, owing to financial literacy, mobile penetration and government schemes aimed at bringing the unbanked within the formal banking system. As a result, the industry has witnessed an increase in access to formal credit to MSMEs, which could be attributed to the increase in the number of MSMEs registered with the Ministry of Micro, Small and Medium Enterprises, to 13.09 million in Fiscal 2023, from 0.50 million in Fiscal 2016. At a higher price band (Rs 57), the stock is valued at 2.4(x) P/BVPS with current book value per share of Rs 23. Factoring the superlative return ratio, FY23 ROA of ~3% and further improvement post fund raise; we believe that SBFC Finance Limited is worth subscribing. Thus we recommend SUBSCRIBE,” said LKP Securities.
About SBFC Finance
SBFC Finance primarily serves customers in tier II and tier III cities, operating in 120 cities across 16 Indian states and two union territories, with a network of 152 branches as of March 2023. In terms of financial performance, the company’s revenue from operations witnessed significant growth, increasing by 38.51% from Rs 529 crore in fiscal 2022 to Rs 733 crore in fiscal 2023.