CreditAccess Grameen shares close flat on stock market debut
CreditAccess Grameen shares opened 8.77% lower on the BSE at Rs 385 a piece and closed at 420.80, down 0.3% from the issue price of Rs 422
Mumbai: After opening nearly 9% lower, shares of microfinance firm CreditAccess Grameen Ltd (CAGL) rebounded and ended little changed on the bourses on Thursday. The company’s Rs 1,131-crore initial public offer (IPO) was subscribed 1.37 times last week. CAGL shares closed at Rs 420.80 on BSE, down 0.3% from its issue price. Earlier in the day, the shares touched a high of Rs 423.30 and a low of Rs 385, respectively. During the day, the stock fell as much as 8.77% on the BSE at Rs 385 a piece, compared to the issue price of Rs 422, which was the upper end of the price band of Rs 418-422 per share. The Sensex rose 0.13% at 38,336.76.
For fiscal year 2018, CreditAccess Grameen has reported a profit of Rs 124.6 crore, up 55.17% from Rs 80.3 crore a year ago. Net interest income increased 30% from a year ago to Rs 440.90 crore.
Gross non performing assets for the year surged sharply by 3702% to Rs 98.09 crore from Rs 2.58 crore a year ago. As a percentage of total loans, gross NPAs stood at 1.97% as compared to 0.08% last year.
“NPA profile that weakened post demonetization is yet to recoup. Despite 100% provision coverage, given the inherent weak customer profile characterized by 50% of the incremental customer addition standing new to formal credit, we believe recoveries could pose a challenge” said brokerage firm Prabhudas Lilladher in a 6 August note.
Emkay Global Financial Services Ltd recommended investors to avoid the issue. They also expressed concerns over near term gains.
CAGL is a Bangalore-based NBFC with forte in microfinance lending. They are focused on rural India and the under penetrated rural market provides growth opportunities.
ICICI Securities, Credit Suisse Securities (India), IIFL Holdings and Kotak Mahindra Capital Company are the lead managers to the issue.
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