SBFC Finance IPO: Strong Demand and Healthy Grey Market Premium Drive Anticipation


SBFC Finance Limited is gearing up for its highly anticipated Initial Public Offering (IPO), with the finalization of the basis of allotment scheduled for today. The company's shares are set to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on August 16, marking a significant milestone for investors and market enthusiasts.

SBFC Finance IPO: Strong Demand and Healthy Grey Market Premium Drive Anticipation

SBFC Finance IPO:
 Strong Demand and Healthy Grey
Market Premium Drive Anticipation

To access allotment details on the BSE website, investors are advised to follow these steps:

a) Choose the 'equity' issue type and select 'SBFC Finance Limited' as the issue name.

b) Provide either the 'Application Number' or 'PAN Number'.

c) Complete the verification process by checking the 'I am not a robot' box and clicking on the 'Search' button.

For the IPO registrar's portal, investors should take the following steps:

a) Select the IPO Name as 'SBFC Finance Limited'.

b) Depending on preference, enter either the 'Application Number', 'Demat Account', or 'PAN Number'.

c) Enter the 'Captcha' as displayed and finalize by clicking the 'Submit' button.

Following the finalization of the basis of allotment, eligible investors can expect the equity shares to be seamlessly transferred to their demat accounts by August 14. Meanwhile, refunds for unsuccessful investors will be promptly credited to their bank accounts by August 11, ensuring a smooth process for all participants.

Analysts have been closely observing the market response to SBFC Finance's IPO, noting a strong demand for its shares in the grey market, where it has been trading at a remarkable 70 percent premium over the upper price band. While analysts have chosen to remain anonymous, they attribute the healthy grey market premium to various factors.

Factors contributing to the robust grey market premium include SBFC Finance's well-diversified pan India presence, attractive valuations, a professional and capable management team, strong financial performance, and improved asset quality driven by stringent credit quality checks. The IPO's success is further bolstered by the impressive performance of private equity firm Clermont Group and investment bank Arpwood Group, which back SBFC Finance.

The IPO, which saw a subscription rate of 70.16 times during the August 3-7 period, received substantial support from different investor categories. Qualified Institutional Buyers (QIBs) played a pivotal role by bidding a staggering 192.9 times the allotted quota. Retail investors showed significant interest, with an oversubscription rate of 10.99 times, while high net worth individuals bid at 49.09 times the reserved portion. Even employees demonstrated their confidence by subscribing 5.87 times the designated allocation.

The IPO's composition featured a fresh issue of Rs 600 crore, aimed at fortifying the company's capital base to meet future business growth and asset-related capital requirements. An additional offer for sale portion of Rs 425 crore, belonging to Arpwood Group, the selling shareholder, was also included in the offering.

Standing out among MSME-focused NBFCs in India, SBFC Finance has achieved remarkable growth in assets under management (AUM), boasting a Compound Annual Growth Rate (CAGR) of 44 percent from FY19 to FY23. This exceptional performance is mirrored in the robust disbursement growth of 40 percent during the same period, further strengthened by the company's expansive presence across 120 cities and 152 branches.

In conclusion, the imminent listing of SBFC Finance shares on both the BSE and NSE has garnered widespread attention and anticipation, driven by strong demand and a remarkable grey market premium. The company's strategic strengths, financial performance, and investor support have positioned it for a successful market debut on August 16, promising a new chapter in its journey of growth and value creation.

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