SBFC Finance IPO: GMP, Subscription Status, and Expert Opinions

Rajesh
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SBFC Finance IPO has created a buzz in the market with its high volume and promising prospects. As the subscription period for the IPO is underway, potential investors are eager to know more about this offering. In this article, we will delve into the details of the SBFC Finance IPO, its grey market premium (GMP), subscription status, and opinions from various brokerages to help you make an informed decision on whether to apply for this IPO or not.

SBFC Finance IPO: GMP, Subscription Status, and Expert Opinions


SBFC Finance IPO Details

SBFC Finance IPO opened for subscription on Thursday, August 3, and will continue until Monday, August 7. The price band for the IPO has been fixed at ₹54 to ₹57 per equity share. The lot size for the IPO consists of a minimum of 260 equity shares and multiples of 260 equity shares thereafter.

The company raised ₹304.4 crore from anchor investors a day before the IPO opened. The list of anchor investors includes prominent names such as Abu Dhabi Investment Authority, Carmignac Portfolio, Axis Mutual Fund, Birla Mutual Fund, Loomis Sayles, Neuberger Berman, and more. Existing investors like ICICI MF, SBI MF, HDFC MF, Amansa, Malabar, and Steadview Capital also participated in the anchor book.

Offer Details

The SBFC Finance IPO comprises a fresh issuance of equity shares worth ₹600 crore and an offer for sale (OFS) of ₹425 crore, resulting in a total offer size of ₹1,025 crore, as per the Red Herring Prospectus (RHP). The company intends to use the net proceeds to meet future capital requirements and support its expansion plans.

SBFC Finance IPO GMP

The grey market premium (GMP) for SBFC Finance IPO has been on an upward trend. On Thursday, it was recorded at +39, indicating that the shares were trading at a premium of ₹39 in the grey market. Considering the current premium and the upper end of the IPO price band, the estimated listing price is expected to be ₹96 per share, a significant 68.42% higher than the IPO price.

SBFC Finance IPO Subscription Status

On the first day of subscription (10:42 IST), the overall subscription status of SBFC Finance IPO stood at 25%. The retail portion witnessed a higher subscription of 38%, followed by 31% for non-institutional investors. However, the Qualified Institutional Buyers (QIBs) portion had not received any subscription at that point, while the employee portion was subscribed at 26%.

Expert Opinions on SBFC Finance IPO

Several brokerage firms have shared their views on the SBFC Finance IPO, and here are the highlights:


1. LKP Research: Recommends 'Subscribe' based on a valuation of 2.4(x) P/BVPS with a current book value per share of ₹23. The firm believes SBFC Finance Limited is worth subscribing given its superlative return ratio and anticipated improvement post-fund raise.


2. Choice Equity Broking Pvt Ltd: Assigns a 'Subscribe with Caution' rating due to the higher valuation at ₹57, which seems on the higher side compared to peers in the RHP. They highlight some key risks to the business, such as rising competition in certain segments and economic uncertainties.


3. SBICAP Securities Ltd: Recommends investors to subscribe to the IPO for potential listing gains, considering the fair valuation at the lower and upper price bands based on FY23 book value.


4. Ventura Securities Ltd: Recommends a 'Subscribe' rating based on SBFC Finance's excellent growth track record and strong fundamentals. The company is supported by reputed institutional investors, which further enhances its potential.


Conclusion

The SBFC Finance IPO has garnered considerable attention, given its high volume and growth prospects. With the GMP indicating a substantial premium and differing opinions from various brokerages, potential investors should carefully consider their risk appetite and conduct thorough research before deciding to apply for the IPO. As always, it is recommended to consult with financial experts to make well-informed investment decisions.

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