Fusion Micro Finance lists at a 2% discount amid volatile market conditions
- Shares of Fusion Micro Finance listed at ₹360.5 against the allotment price of ₹368 per share.
- The market capitalisation of the company stood at ₹3,627 crore.
- The IPO was subscribed 2.95 times on the last day of the IPO bidding process.
AdvertisementFusion Micro Finance’s stock listed at ₹360.5 – that’s ₹7.5 lower than its allotment price of ₹368 per share. The stock made its debut on the exchanges on Tuesday, at a 2% discount to the IPO’s upper price band.
The company’s listing price is much below grey market estimates which expected an upside of ₹5 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.
The issue was subscribed 2.95 times on the last day of the IPO bidding process. The portion reserved for retail investors was subscribed 0.51 times, while qualified institutional investors subscribed 8.59 times.
The price band of the IPO was at ₹350-368 a share. Meanwhile, benchmark indices have also opened flat on Tuesday.
The market capitalisation of the company stands at ₹3,627 crore, according to BSE data.
Some of its peer microfinance companies listed on exchanges also traded in the red on Tuesday.
|Listed peers||Market cap||% change on Tuesday|
|Equitas Small Finance Bank||₹6,651 crore||-0.94%|
|Spandana Sphoorty Financial||₹4,117 crore||-0.44%|
|CreditAccess Grameen||₹15,488 crore||0.47%|
|Ujjivan Small Finance Bank||₹5,482 crore||1.45%|
|Suryoday Small Finance Bank||₹1,077 crore||1.85%|
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.
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.
The company has been reporting a fall in profits consistently for the last three fiscal years, and has impacted the overall demand for the IPO.
|FY22||₹21 crore||₹525 crore|
|FY21||₹44 crore||₹435 crore|
|FY20||₹69 crore||₹440 crore|
The total issue size of the IPO was ₹1,103 crore, including fresh issue of ₹600 crore. The rest was an offer for sale of 1.36 crore equity shares by the company's shareholders and promoters.
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