Latest News
-
Closing Bell: Market Ends With Gains For The 4th Straight Day; Nifty Holds Above 22,400, Banks Lead Gains -
1:10 Split, 5 Bonus, 70% Dividend: Crorepati Defene PSU Hits New High, 108605% Returns; BUY For Long Term -
Rs 55/Share Dividend Announced: Multibagger Refineries PSU Declares 72% Jump In Q4 Profit -
PayU Gets RBI's In-principle Nod To Operate As Payment Aggregator -
Rekha Jhunjhunwala Portfolio Stock Jubilant Ingrevia Hits Record High; More Upside Ahead? -
Gold Prices: 10 Grams Of 22-24 Carats Rise By Rs 9,500 To Rs 10,600 From 2024 Lows; Strategy For Buying -
JNK India IPO: Retail Investors Lead With Subscriptions On Day 2; GMP Hints Premium Listing; Check Status -
Rs 60 Dividend: Multibagger Small Cap Power Stock To Consider Dividend Again On May 2 -
40000% Returns In 10 Years: This Microcap Dividend Paying Multibagger Stock Acquires Square Port Shipyard -
Gold Prices India: 10 Grams Of 22K Yellow Metal Jumps After Falling By Rs 2000
AU Small Finance Bank IPO Opens Today: Should You Subscribe?
Though, brokerages are positive with respective to betting on the issue, high valuations in comparison to listed stocks of the peer companies do not suggest subscription to the IPO issue.
Jaipur-based company which got RBI's nod to function as a Small Finance Bank has opened its IPO issue for raising fresh funds from the primary market. The issue opens on June 28, 2017 and ends on June 30,2017. After about 4 players including CDSL, Tejas Networks, GTPL Hathway and Eris LifeSciences, AU is the last company to hit the primary market in June.
Let us know in detail whether the opened issue has something to offer for a retail investor.
Company's Business
The NBFC company recently started operations as a Small Finance Bank catering primarily to individuals who did not had access to basic banking facilities. Before its full-scale functioning as a SFB on April 19, 2017, the company was categorized as a non-deposit accepting asset finance company' (NBFC-ND-AFC) by the RBI.
The company's primary work areas include vehicle finance, SME loans and MSME loans.
Details of the Issue
The issume is an offer for sale or OFS of 5,34,22,169 equity shares by company's promoters and investors. The price band for the issue is decided at Rs. 355-358 per share. The IPO can be subscribed to with a minimum bid size of 41 shares and in multiples of 41 shares thereafter. Listing of the share is proposed on both the major exchanges of the company that include BSE and NSE.
The company also reserves subscription of upto 10 lakh shares by eligible employees. The anchor investors' bidding that opened yesterday saw company raising Rs. 563 crore. 34% of the issue is open for subscription by retail investors.
Managers of the issue include HDFC Bank, ICICI securities, Citigroup Global Markets India and Motilal Oswal Investment Advisors.
Objective
The primary objective is to benefit from listing the stock on the bourses, more so the mopped up funds would not go to the company, instead they would be provided to each of the shareholder and investor selling their equity share in proportion to their offers made.
The objects of the offer are to achieve the benefits of listing equity shares on stock exchanges and for the offer for sale of 53,422,169 equity shares.
Valuations
Though different brokerages, on the back of the company's good financial performance and citing the fact that company ventures in areas not catered to by larger financial institutions, are highly recommending the issue. But on valuations front with five times the FY17 book value, the issue is an expensive offer compared to other listed peers. This means that on listing there will be little room for an upside in the stock.
Conclusion
So, the retail investors can be better off by investing in the stock of AU Small Finance bank upon listing once they see the stock hitting some lows.
GoodReturns.in
