NEW DELHI :
After witnessing a massive subscription of more than 165 times last week in its ₹750 crore IPO, shares of Ujjivan Small Finance Bank listed today on both the BSE and NSE with a 60% gain. After opening at ₹58 on BSE, Ujjivan Small Finance Bank's shares closed the day at ₹55.90, a premium of 51.08%. On NSE, the shares commanded a price of ₹55.30 at closing.
The IPO, which was open for subscription during December 2-4, was subscribed more than 165 times at a price band of ₹36-37 per share. Ujjivan Small Finance Bank had fixed the price in the upper range of ₹37 for allotment of shares, which was completed on Tuesday.
Ujjivan Small Finance Bank IPO saw the highest subscription among all IPOs since January 2018 as investors found the valuation attractive and asset quality strong.
Vinod Nair, Head of Research at Geojit Financial Services, said the experience of Ujjivan Financial Services Ltd as an erstwhile microfinance institution, coupled with the ability to address mass market customers will further aid Ujjivan Small Finance Bank to be among the leading players in the small finance banking space. "With strong asset quality and attractive valuation, we have a positive view on a long-term perspective," he said.
Anusha Raheja, BFSI Research Analyst at LKP Securities, points out that the Ujjivan bank's IPO was mainly to comply with RBI norms to list within 3 years of receiving a banking license. "Ujjivan Financial Services diluted its stake in the bank from 94.4% to 80% post IPO. The promoter stake in the bank has to reduce down further to 40 percent in the next 2 years time which shall be a hangover in the near-term," Raheja said.
"The IPO comes with PE of 16.5 which is half of its listed peer AU SFB and PB of 2.3 where AU SFB is trading at PB of 6.9. Apart from attractive valuations, the rural penetration of its promoter will help it to expand its banking services to PAN India," Santosh Meena, senior analyst, TradingBells, said.
Naveen Kulkarni, Head of Research, Reliance Securities, said the IPO was priced at 2.1x P/BV (including post IPO capital), which made it an attractive investment opportunity. Most brokers and analysts had recommended investors to subscribe to the IPO.
The category meant for qualified institutional buyers (QIBs) was subscribed 111 times, non-institutional investors (NIIs) category witnessed a subscription of 473 times, while the same for retail investors stood at over 49 times.
Kotak Mahindra Capital Company, JM Financial and IIFL Securities managed the IPO. Microfinance lender Ujjivan Financial Services is the holding company of Ujjivan Small Finance Bank and its shareholders got a ₹2 discount on the IPO price band.