Utkarsh SFB Listing: Shares Make Market Debut At 60% Premium

On Friday, Utkarsh Small Finance Bank Ltd. shares were listed at a premium on the stock exchanges. The stock has been priced at Rs 40 per share on the NSE, which is 60% higher than the issue price, and at Rs 39.95 per share on the BSE. The company has set the pricing range for the scheduled initial public offering at Rs 23 to Rs 25 per equity share. On Wednesday, July 12, the public issue subscription period began and closed on Friday, July 14.

According to the red herring prospectus (RHP), the Utkarsh Small Finance Bank IPO is completely a new offering of equity shares totalling up to Rs 500 crore at a face value of Rs 10 with no offer for sale (OFS) portion. ICICI Securities Ltd. and Kotak Mahindra Capital Company Ltd. are the IPO's book-running lead managers, while KFin Technologies Ltd. is the issue's registrar.

Utkarsh Small Finance Bank received Rs 222.75 crore from 20 anchor investors on Tuesday, July 11. 8.91 Cr equity shares allocated to anchor investors at a maximum price range of Rs 25 per share. Among the anchor participants were Aditya Birla Sun Life Mutual Fund (MF), Edelweiss Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mahindra Mutual Fund, Goldman Sachs, Massachusetts Institute of Technology Basic Retirement Plan Trust, and others.

On the last day of subscriptions, Utkarsh Small Finance IPO was subscribed 101.91 times. At the end of the three-day bidding procedure, the retail component had been subscribed 72.11 times, the NII portion 81.64 times, and the QIB portion 124.85 times. While the employee component received 16.58 subscriptions.

Commenting on the healthy market debut of Utkarsh Small Finance today, Satish Kumar Sr. Research Analyst at Choice Broking said "Utkarsh SFB listed at ~58% premium to the IPO price, in line with our estimation. We have a 'Subscribe' rating on the issue. We are optimistic over the strong improvement in the Bank's return ratios over the past three fiscals, favourable macros supporting the microfinance sector and attractive valuation. Given the hefty listing gain and valuation gap with peers largely over, we recommend investors to book profit at the current level."

Utkarsh Small Finance Bank (SFB) on Friday got listed at Rs 39.95 per share on BSE and 40 on NSE, which of 60 percent premium over its initial public offering (IPO) issue price of Rs 25. It has over 110x subscriptions and defeated Ideaforge Technology which was subscribed to over 106x.

The category for qualified institutional bidders (QIB) was subscribed 135.71 times, while the non-institutional investors' portion was subscribed 88.74 percent (under subscribed). The retail quota was oversubscribed with 78.38 times, while the employee portion received 18.02 times bids. Those who have received allotment are happy.

But those who are missed it what should they do now? Should they apply it to the secondary market? Do not be prey to FOMO. If the stock has potential it will be visible in the secondary market too. CMP is 47 You can buy it near 49 and have a target expectation of 55 to 100 in the near term. Keep stop loss at 40, said V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT).

Nirav Karkera, Head of Research, Fisdom said, "The IPO has listed at a stellar premium. The bank continues to operate in a growth segment with the opportunity to benefit from sectoral and economic tailwinds. The business reflects robust strength. However, it may take some time for the concerns around asset quality and sustainability of profitability to ease. While near term investors may partially book gains, one can expect longer term investors to observe earnings and growth trajectory for at least a quarter or two before allocating aggressively."

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.