SBFC Finance IPO versus Concord Biotech IPO: Which one should you choose?

SBFC Finance IPO is open for subscription for last day today, on August 7. Meanwhile, Concord Biotech IPO will close its initial public offering tomorrow. Two mainboard issues, SBFC Finance IPO and Concord Biotech IPO, began to accept subscriptions last week - while SBFC Finance IPO opened for bidding on August 3, Concord Biotech IPO launched its issue on August 4. Investors are hoping for the next top IPO that will repeat the performance after seeing stellar listing gains in Utkarsh SFB, IdeaForge, and Cyient DLM.

Given that the two businesses are from two different sector, where SBFC Finance IPO is a non-banking finance company (NBFC), while Concord Biotech IPO is a research & development biopharma company, most analysts are bullish on both. 

SBFC Finance IPO vs Concord Biotech IPO

In case you are an investor who is looking to apply for only one, here are some expert views:

Speaking on SBFC Finance IPO vs Concord Biotech IPO, Vaibhav Kaushik, Research Analyst at GCL Broking said, “If you ask me to choose either of the two public issues, I would advice investors to go for SBFC Finance IPO as it is providing better valuation comfort to investors. It is priced reasonably against its peers valuations as well. So, the public issue may list between ₹80 and ₹95 apiece levels.”

Meanwhile, some feel both IPOs are good for listing gains but SBFC Finance is a the issue to go for with long-term perspective.  

Also read: SBFC IPO: Should you subscribe?

“Amid an ongoing bull market, the IPO market is witnessing heightened interest, with two notable companies preparing to debut. SBFC stands out as a rapidly expanding Non-Banking Financial Company (NBFC) with robust earnings growth and stable asset quality. However, it bears the vulnerability of being sensitive to interest rates and market cycles. Nevertheless, it is poised to offer strong listing gains for investors,” said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

“Concord Biotech, on the other hand, is a leading Active Pharmaceutical Ingredient (API) company with a proven track record. Despite facing industry-wide pressure on margins in recent quarters, it is worth noting that this IPO is purely an Offer For Sale (OFS). The valuations may not appear overly attractive, but this IPO can still deliver moderate listing gains,” Mishra added.

“For investors looking for quick returns, both IPOs present opportunities for listing gains. However, aggressive investors with a long-term outlook might find SBFC particularly enticing, given its potential for substantial growth over time. While Concord may not yield significant immediate gains, it could still be a promising hold for those seeking steady growth prospects in the pharmaceutical sector,” Anubhuti Mishra of Swastika Investmart further said.

According to Vinit Bolinjkar, Head of Research, Ventura Securities SBFC Finance is a business that focuses on the Micro, Small & Medium Enterprises (MSME) sector, with a pan-Indian presence and a well-diversified network of customers. Hence, they are protected against geographic risk because they do not have any concentration in any state.

Second they have reduced credit exposure to individual customers resulting in a more granular portfolio thereby spreading risks across a large pool of customers.

"We anticipate that SBFC can grow 5-6% points higher that the overall credit grow of 25% cagr over the next few years.

Assuming marginal deterioration in asset quality we value SBFC at 1.9x fy26 adj P/BV. We expect a conservative PT of 75/share over the next 24 months," added Bolinjkar.

According to some analysts, Concord Biotech has loyal customers all over the world, and they have plants registered in numerous countries. Their enhanced capacity complements the IPO fund very well. The company will continue to grow well in the future. They are involved in the formulation of Active Pharmaceutical Ingredients (API), CDMO, and expanding into the injectable market. Their capacity has more than doubled.

SBFC Finance IPO

SBFC Finance IPO opened for subscription on Thursday, August 3, and closes on Monday, August 7. The company has fixed the price band at ₹54 to ₹57 per equity share for the proposed initial public offer.

SBFC Finance IPO comprises of fresh issuance of equity shares worth ₹600 crore and an offer for sale (OFS) of ₹425 crore, according to the Red Herring Prospectus (RHP). The total offer size of SBFC Finance IPO now is ₹1,025 crore.

Concord Biotech IPO

Concord Biotech IPO opened for subscription on Friday, August 4, and will close on Tuesday, August 8. The company has fixed the price band at ₹705 to ₹741 per equity share of face value of ₹1 each.

Rekha Jhunjhunwala-backed Concord Biotech IPO consists of a pure offer-for-sale by Helix Investment Holdings of up to 20.93 million shares. The issue offer is priced at ₹1,550 crore on the upper band, and the firm is worth ₹7,752 crore.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.