ESAF Small Finance Bank IPO: Issue Oversubscribed By 73.15x On Last Day, What GMG Hints For Listing?

ESAF Small Finance Bank's Rs 463 crore worth initial public offer (IPO) oversubscribed by a massive 73.15 times on the last day of the issue. The IPO opened on November 3rd and closed on November 7th. ESAF will be listing its equity shares on BSE and NSE most likely next week.

As per the data given on NSE, cumulatively, the IPO received 4,22,30,07,500 equity shares bids -- compared to the offered size of 5,77,28,408 equity shares -- registering oversubscriptions of 73.15X.

Strong bidding was seen in Qualified Institutional Buyers (QIBs) who oversubscribed the reserved portion for them by 173.52 times. QIBs included foreign institutional investors, and domestic financial institutions such as banks, insurance companies, mutual funds and others.

Also, on Day 3, Non-Institutional Investors (NII) showed robust demand as the portion oversubscribed by 84.37 times, and the retail individual investor (RII) portion subscribed by 16.97 times. Additionally, the portion reserved for employees also fully subscribed by 4.36 times.

NIIs included corporates, individuals other than RIIs generally investors who buy shares more than Rs 2 lakh worth. Meanwhile, retail investors are those who invest a maximum of up to Rs 2 lakh.

After the IPO, the allotment of shares and listing will be followed in the coming days. On Wednesday, as per Investor Gain, ESAF Small Finance Bank IPO GMP is at Rs 21. With a price band of 60.00, ESAF Small Finance Bank IPO's estimated listing price is ₹81 (cap price + today's GMP). The expected percentage gain/loss per share is 35.00%.

The basis of allotment of equity shares will be carried on November 10, while refunds will be initiated on November 13, and credit of shares in demat accounts is likely to take place on November 15. As per the Chittorgarh website, the listing of the ESAF IPO is expected on November 16.

The IPO comprised of fresh issue worth Rs 390.7 crore and an offer for sale of up to Rs 72.3 crore. The 100% book building had a price band of Rs 57 to Rs 60 per share. The bid lot size was 250 Equity Shares and in multiples thereof.

Proceeds from the fresh issue will be utilized towards the augmentation of its Tier-1 capital base, increasing its onward lending business, and ensuring compliance with regulatory requirements on capital adequacy.

Established in 2016, ESAF Small Finance Bank is a south-centric small finance bank targeting unbanked and underbanked customers, primarily in rural and semi-urban areas. The bank offers micro loans, retail loans, MSME loans, loans to financial institutions, and agricultural loans. ESFBL serves 7.15 million customers through its 700 banking outlets out of which 502 banking outlets are in rural and semi-urban centres, across 21 states and two union territories, as of June 30, 2023.