The initial public offer (IPO) of Jana Small Finance Bank was subscribed 59% on Wednesday, the first day of the bidding process. The retail portion of the issue was booked the most at 91%, followed by non-institutional investors at 66%. There were no bids yet in the QIB category.
The issue, which comprises fresh equity worth Rs 462 crore and an offer for sale (OFS) of 26.08 lakh shares, closes on February 9.
The company has fixed a price band of Rs 393-414 per share, where investors can bid for 36 shares in one lot and in multiples thereafter.
About 50% of the issue is reserved for qualified institutional buyers, 15% for non-institutional bidders, and 35% for retail investors.
Jana Small Finance Bank IPO review
Analysts advised investors to subscribe to the IPO over the company’s strengths, which include its wide distribution network, integrated risk management approach and digitised operations.”At the upper price band, the company is valued at P/BV of 1.50x with a market cap of Rs 4,330 crore post issue of equity shares and return on net worth of 14.40%. We believe that the IPO is fairly priced, hence we recommend a Subscribe rating to the IPO,” said Anand Rathi.
In the unlisted market, the company’s shares are fetching a premium of Rs 80
Jana SFB is the fourth largest small finance bank in terms of AUM. As of September 2023, it had 771 banking outlets, including 278 banking outlets in unbanked rural centres. The company boasts of marquee investors including TPG, HarbourVest Group, Amansa Capital, Morgan Stanley and Hero Ventures.The Bank’s operations are digitalised and majority services are available online to customers with integrated risk and governance framework.
The small banking lender’s gross advances increased from Rs 11,838 crore in FY21 to Rs 18,001 crore in FY23, representing a CAGR of 23.31%, and further increased to Rs 21,347, as of September 2023.
For the period ended September 2023, total income increased 31% to Rs 2,215 crore, while profit more than doubled to Rs 213 crore.
Axis Capital, ICICI Securities and SBI Capital Markets are the book running lead managers to the issue.
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