The anticipated initial public offering (IPO) of SBFC Finance will be open, for subscription from August 3 to 7. The company, which deals with types of loans like MSME and gold-backed loans has seen its shares perform well in the market with a premium of Rs 40. The IPO is priced at Rs 54 57, per share. Aims to raise Rs 600 crore to support expansion plans.
Mark your calendars as SBFC Finance’s Initial Public Offering (IPO) gears up for public subscription from August 3 to August 7. The anticipation is palpable, with the company’s shares enjoying a substantial Rs 40 premium in the unlisted market – a clear indicator of robust investor demand.
SBFC Finance, a noteworthy non-deposit-taking, non-banking financial company, specializes in extending a range of loans, including secured MSME loans and loans backed by gold collateral.
The IPO comprises a fresh equity issue of up to Rs 600 crore alongside an offer for sale (OFS) of up to Rs 425 crore. This enticing opportunity is priced within the attractive range of Rs 54-57 per share. At the upper echelon of this range, analysts value the stock at a promising 2.4 times P/BVPS, leveraging its existing book value per share of Rs 23.
Prospective investors can participate by bidding for a minimum of 260 shares, with the flexibility to increase in multiples thereafter. Notably, 50% of the offering is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NII), and the remaining 35% is set aside for retail investors.
The freshly injected capital of Rs 600 crore from the IPO will play a pivotal role in fortifying SBFC Finance’s capital base, empowering it to meet future capital requirements. Serving a diverse clientele, the company primarily extends support to entrepreneurs, small business proprietors, and self-employed individuals, fostering economic growth. Notably, among India’s MSME-focused NBFCs, SBFC Finance stands out with impressive assets under management growth of 44% CAGR over the FY19-23 period.
Against the backdrop of monetary tightening, SBFC Finance has managed to elevate its spread from 7% in FY21 to an impressive 7.7% in FY23. This achievement can be attributed to skillful loan re-pricing strategies and an enhanced rating profile, effectively maintaining a check on the cost of funds. The company’s financial performance for the fiscal year ending March 2023 saw revenues soaring to Rs 740 crore, with a commendable profit of Rs 149.7 crore.
Managing the intricacies of the IPO are reputable book-running lead managers, namely ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company. Overseeing the process diligently is KFin Technologies, the esteemed registrar of the offer.
