The initial public offering (IPO) of SBFC Finance continued to receive a robust response from investors. The issue was subscribed 4.87 times at 3:30 pm on the second day of bidding, August 4, 2023. It has received bids for 61.60 crore shares against 12.64 crore shares on offer.
The category for non-institutional investors (NII) was subscribed to the most, 10.65 times, followed by the portion reserved for retail investors, which saw 4.62 times bids. Meanwhile, the qualified institutional buyers (QIBs) quota was subscribed to 1.11 percent. Employee portion also saw 2.27 times subscription.
The NII part received bids for 28.44 crore shares versus 2.67 crore shares on offer while the retail quota received bids for 28.78 crore shares versus 6.23 crore shares offered. The QIB category received bids for 3.95 crore shares against 3.56 crore on offer. Meanwhile, the employee portion got bids for 42.26 lakh shares versus 18.63 lakh shares on the offer.
GMP: The company's shares in the grey market are trading at a healthy premium of ₹40, indicating a decent response for the issue.
However, one must note that grey market premium is only an indicator of how the company's shares are performing in the unlisted market and can change quickly.
The ₹1,025-crore initial public offering (IPO) of non-banking finance company SBFC Finance opened for subscription on Thursday, August 3 and will close on August 7. The price band for the offer has been set at ₹54-57 per share. This will be the first IPO to be launched in the month of August 2023.
The issue comprises of a fresh issuance of shares worth ₹600 crore and an offer for sale (OFS) of ₹425 crore by promoters. Arpwood Partners Investment Advisors LLP will sell shares worth ₹306.25 crore, Arpwood Capital ₹75.16 crore, and Eight45 Services LLP ₹43.59 crore via the OFS.
The actual fresh issue size was ₹750 crore, of that, ₹150 crore was raised via the allotment of 2.72 crore equity shares to Amansa Investments in a pre-IPO placement. Hence, the fresh issue size has been reduced to ₹600 crore from ₹750 crore.
The company will utilise fresh issue proceeds, excluding IPO expenses, mainly for augmenting its capital base to meet future capital requirements arising out of the growth of the business and assets, while the offer for sale money will go to selling shareholders.
Most brokerage firms suggest subscribing to the issue of its pan India network, strong return ratios, robust business model and lower cost of funds. However, some have flagged risks of higher valuations and probable pressure on margins as the key risks for the company.
Incorporated in 2008, SBFC Finance is a non-banking finance company that provides secured MSME loans and loans against gold primarily to entrepreneurs, small business owners, self-employed individuals, and salaried and working-class individuals. The company has an extensive pan-India network with over 157 Branches in 105 cities in 16 states and two union territories. By March FY23, it had provided loans to over 1.02 lakh customers. It focuses on disbursing loans with a ticket size in the range of ₹5 lakh to ₹30 lakh and as of March 2023, 87.27 percent of its AUM had a ticket size within this range.
The basis of allotment of IPO shares will be finalised by the NBFC on August 10. Equity shares will be credited to the demat accounts of eligible investors by August 14. Unsuccessful investors will get refunds in their bank accounts by August 11.
The company is likely to list on the BSE and NSE on August 16.