Shares of Fedbank Financial on Thursday got listed with a discount of 1.6% on BSE on debut at the bourses on Thursday. The stock was listed at Rs 137.75 on BSE.
Meanwhile, on the NSE the stock was listed at Rs 138, down 1.4%.
The IPO, which was priced in the range of 133-140, received subscription demand twice the shares on offer.
“Despite the company’s strong track record of growth and profitability, along with its diversified customer portfolio and focus on providing affordable financial solutions to underserved and unbanked segments, the lack of enthusiasm among investors is striking,” said Shivani Nayti of Swastika Investmart.
Net proceeds from the fresh issue will be utilised towards augmenting Tier–I capital base to meet its future capital requirements, arising out of the growth of business and assets. A part of the proceeds will also be used for meeting offer expenses.
Fedbank Financial is one among five private bank promoted NBFCs in India, focusing on catering to the MSMEs and the emerging self-employed individuals sector.
It is the fastest growing gold loan NBFC in India among its peers and has the second lowest cost of borrowing among the MSMEs, gold loan peer set in India in FY23.
Housing finance and gold loans cover 46% and 12% of the retail loans industry, respectively, in India in FY23. Crisil MI&A estimates the outstanding value of loans given out by organised financiers’ – banks and NBFCs – to be Rs 6.1 trillion, with NBFCs accounting for one-quarter of the market.
As of March 2023, the company boasts of third fastest AUM growth among NBFCs in India with a three year CAGR of 33% between FY20-23. Nearly 86% of the total loan assets are secured against tangible assets, namely gold or customer’s property.
Its revenue from operations rose 46% year-on-year to Rs 361 crore in the three months ended June period, while profit jumped 23% year-on-year to Rs 53.8 crore.
ICICI Securities, BNP Paribas, Equirus Capital, and JM Financial are acting as the book running lead managers to the issue.
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