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The initial public offering (IPO) by SBFC Finance will open for subscription on Thursday, 3 August, and conclude on 7 August. The non-banking lender has fixed its price band in the Rs 54–57 range. The company is aiming to raise Rs 1,025 crore through the issue, comprising fresh issuance of shares worth Rs 600 crore and offer for sale (OFS) worth Rs 425 crore, according to the Red Herring Prospectus (RHP) filed before markets regulator Securities and Exchange Board of India (SEBI).
SBFC Finance had refiled its papers with SEBI in March 2023. The IPO size was reduced from Rs 1,600 crore to Rs 1,200 crore. Investors can bid for a minimum of 260 equity shares and in multiples of 260 equity shares thereafter.
The net proceeds from the IPO would be used towards augmenting the company’s capital base to meet their future capital requirements arising out of the growth of the business and assets, while the proceeds from OFS will go to the selling shareholders of the company.
Kotak Investment Banking, Axis Banking, and ICICI Securities are the book-running lead managers of the company, according to the RHP filed before SEBI.
According to top sharebrokers, SBFC Finance shares were trading at a premium of Rs 38 in the grey market on Monday.
SBFC Finance shares will be listed on both the BSE and NSE with 16 August as the tentative date of listing. KFin Technologies has been appointed as the registrar for the issue.
The company has booked shares worth Rs 10.25 crore for its eligible employees, who will get a discount of Rs 2 per share. Under the issue, 50 per cent portion has been booked for qualified institutional bidders (QIBs), 35 per cent shares will be reserved for retail investors, and 15 per cent has been booked for non-institutional investors (NIIs).
SBFC Finance offers its services to entrepreneurs and small business owners who are underserved or unserved by traditional financial institutions. The company has a presence in over 466 districts in 16 Indian states and two union territories. Currently, they have 152 branches.
For the financial year 2022–23, SBFC Finance reported a net profit of Rs 149.74 crore with a total revenue from operations of Rs 740.03 crore. The NBFC posted a net profit of Rs 64.52 crore with revenue from operations of Rs 530.70 crore in the year-ago period. Its AUM (asset under management) during the period increased to Rs 4,942.82 crore from Rs 3,192.18 crore.
What is GMP (Grey Market Premium):
SBFC Finance IPO GMP (Grey Market Premium) trading normally
starts about 4-5 days prior to IPO opening and continues till the listing date.
In the case of SBFC Finance Ltd, we already have GMP data for the last 3 days,
which should give a reasonable picture of the likely listing performance.
Needless to say, the real picture would only be evident once the price of the
issue is also finalized which will give an idea of the percentage return on
listing that is embedded in the GMP.
There are 2 factors that impact the GMP. Firstly, the market
conditions have a deep impact on the GMP, which includes the levels of the
Nifty and Sensex as well as the general IPO market and macro conditions.
Secondly, the extent of subscription for the IPO across the retail and the QIB
segments also has a deep impact on the GMP as it is indicative of investor
interest in the stock. Generally, strong QIB subscription is a trigger for a
spike in GMP.
There is one small point to remember here. The GMP is not an
official price point, just a popular informal price point. However, in most
cases, it has been observed to be a good informal gauge of demand and supply
for the IPO. Hence it does give a broad idea of how the listing is likely to be
and how the post-listing performance of the stock would be.
What does the SBFC Finance IPO GMP tell
us about the likely listing price?
GMP tends to be a good mirror of the real stock story. More than
the actual price, it is the GMP trend over time that gives insights about which
direction the wind is blowing. Here is a quick GMP summary for SBFC Finance IPO
for which the data is available.
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