SBFC Finance debuts at 43% premium meeting grey market expectations

• The stock listed at ₹81.99, that’s ₹25 above its IPO price.
• The market cap of the company is ₹8,725 crore, as per Bombay Stock Exchange.
• The public offer was subscribed by 70x with aggressive bidding from QIBs.

SBFC Finance’s stock made its debut on the bourses at ₹81.99 – that’s a 43.8% premium over its IPO price of ₹57, on Wednesday. The grey market was expecting 50% listing gains on the stock. The market cap of the company is ₹8,725 crore, as per Bombay Stock Exchange.

The public offer was subscribed by 70 times over the shares on offer, on the last of the issue. Qualified Institutional Buyers (QIBs) bid aggressively for the issue and this portion was subscribed almost 193 times.

Non-institutional investors too showed good interest as this portion has been subscribed 49 times. The retail portion was also subscribed by around 11 times

The company raised ₹304.43 crore from anchor investors like Abu Dhabi Investment Authority, Carmignac Portfolio, Axis Mutual Fund, Birla Mutual Fund, Loomis Sayles and Neuberger Berman.


Source: BSE

The company has set a price band of ₹54-57 per share. SBFC Finance said that the net proceeds from the fresh issue to the tune of ₹600 crore will be used for expanding its capital base to satisfy future capital requirements.

The company is a non-deposit-taking non-banking finance company (NBFC) offering secured MSME loans, and loans against gold. A majority of its borrowers are entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals.

It primarily caters to customers in tier II and tier III cities, and focuses on serving customers who have a strong credit history but may lack formal proof of income documents.

It has a footprint in 120 cities across 16 Indian states and two union territories, operating through a network of 152 branches.

A report by SBI Securities says that SBFC IPO is fairly valued, and recommended investors to subscribe for its listing gains at a cut-off price.

A report by Geojit says that, at the upper price band of ₹57, SBFC is available at a valuation that’s lower than its peers. “Considering the lower valuation, consistent improvement in asset quality, and decent business performance, we assign a subscribe rating for the issue on a short-to medium-term basis,” it says.