Capital Small Finance Bank IPO subscribed 4 times on final day; NII, QIB portions see huge demand
The initial public offering (IPO) of Capital Small Finance Bank saw decent demand during the final day of bidding. The IPO was opened for subscription on Wednesday (February 7) and closed today (February 9). During the final day, the IPO received bids for 3,26,04,256 shares as against the 81,47,373 shares available for subscription, translating into a subscription rate of 04 times.
The retail portion of the public issue saw a healthy demand, as this portion was subscribed to 2.49 times, while the Non-Institutional Investors’ (NII) category was subscribed to 4.05 times. The Qualified Institutional Buyers’ (QIB) portion witnessed the highest level of subscription, reaching 6.64 times the allotted shares.
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Through the issue, the company aims to raise ₹523 crore. The issue is a combination of a fresh issue of 0.96 crore shares aggregating to ₹450.00 crore and an offer for sale (OFS) of 0.16 crore shares aggregating to ₹73.07 crore, through which promoters and external investors will dilute five percent of their pre-issue holdings.
The price band for the offer has been fixed at ₹445–468 per equity share, with a face value of ₹10 each.
Nuvama Wealth Management Limited, Dam Capital Advisors, and Equirus Capital Private Limited are the book-running lead managers of the Capital SFB IPO, while Link Intime India Private is the registrar for the issue.
About Capital Small Finance Bank
The Jalandhar-based bank, which began operations in 2016 after converting itself from a local area bank, is 24% owned by the promoter family led by Sarvjit Singh Samra and his family. In 2015, Capital Small Finance Bank became the first non-NBFC microfinance entity to receive the SFB license.
The company has a strong presence in semi-urban and rural areas with a branch-based operating model. The company’s listed peers are AU SFB, Equitas SFB, Ujjivan SFB, Jana SFB, ESAF SFB, Utkarsh SFB, Fincare SFB, and Suryoday SFB.
The bank offers a range of banking products including agriculture loans, MSME and trading loans (working capital and machinery loans), and mortgages (housing loans and loans against property).
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The bank in its DRHP said it has one of the best asset quality among the SFBs, represented by GNPA and NNPA of 2.77% and 1.36%, respectively, as of Fiscal 2023. It said it has the lowest average GNPA at 2.45% and the third lowest average NNPA among the SFBs at 1.28% from Fiscal 2021 to Fiscal 2023.
“We are the only SFB to show an increasing trend in profit after tax, RoA, and RoE for both Fiscal 2022 and Fiscal 2023, depicting our consistent outperformance against comparable SFBs,” Capital Small Finance Bank said in its DRHP report.
Meanwhile, the IPO allotment process is anticipated to be concluded by February 12. Those who are not allotted shares will receive refunds, which will be initiated on February 13. Shares will be credited to those who are allotted shares, and they will become available for trading on the secondary market on February 14. As it is a mainboard IPO, the shares will be listed on both the NSE and BSE.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
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Published: 09 Feb 2024, 06:11 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.