Nov 2, 2022
By: Bhakti MakwanaThe IPO of New Delhi-based microfinance company that provides financial services to underserved women across India opens its IPO for subscription on November 2 and closes on November 4. The price band of the IPO is set at ₹350-368 a share.
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The total issue size of the IPO is ₹1,103 crore, which includes fresh issue of ₹600 crore. The rest of it is an offer for sale of 1.36 crore equity shares by the company's shareholders and promoters.
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The microfinance lender’s business runs on a joint liability group-lending model, wherein a small number of women form a group (typically comprising five to seven members) and guarantee one another's loans.
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The company has 2.9 million active borrowers served through a network of 966 branches, 9,262 permanent employees across 377 districts in 19 states and union territories in India, as of June 30, 2022.
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Fusion Micro Finance has been reporting a fall in profits consistently for the last three fiscal years while revenue continues to rise throughout.
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Increase in the level of NPAs or provisions may adversely affect business, financial condition, operations and cash flows of the company in the future, say analysts.
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The proceeds from the IPO will be utilised towards augmenting the capital base of the company.
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The grey market premium (GMP) of the company’s shares stand at ₹40 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
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The company’s shares are scheduled to be allotted on November 10.
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Fusion Micro Finance will be listed on BSE and NSE on November 15.
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