SBFC Finance IPO: NBFC's Rs 1,025 Crore IPO To Open On August 3, Price Band Fixed At Rs 54-57 Per Share

SBFC Finance IPO: NBFC offering secured MSME loans and loans against gold, SBFC Finance is set to launch its initial public offering (IPO) on August 3rd. Subscriptions in the IPO will close on August 7. Anchor investors bidding will be allowed on August 2nd. SBFC plans to raise about Rs 1,025 crore from the issue and is proposed to be listed on stock exchanges BSE and NSE.

GMP: According to IPO Bazar, the grey market premium of SBFC Finance IPO is between Rs 38 to Rs 40 per share. This suggests a premium listing in the range of 66% to 70% as of now.

IPO size: The IPO includes a fresh issue of Rs 600 crore and an offer for sale (OFS) of Rs 425 crore -- taking the total size to Rs 1,025 crore. Overall, the company will offer 18,98,87,816 equity shares.

Selling shareholders: Under the OFS, promoters Arpwood Partners Investment Advisors will offload stakes worth Rs 306.25 crore, while Arpwood Capital and Eight45 Services LLP to sell equity shares worth Rs 75.16 crore and Rs 43.59 crore respectively.

Price band: The lower price band for the IPO is fixed at Rs 54 per share and the upper price band is Rs 57 per share. The company also offers a Rs 2 per share discount to eligible employees who are bidding in the Employee Reservation Portion. The face value for the proposed equity shares is set at Rs 10 each.

Lot size: The minimum bid quantity in the IPO is 260 equity shares. However, the maximum bid quantity for qualified institutional investors is over 18.79 crore shares, while the maximum bidding for non-institutional investors is nearly 9.40 crore equity shares.

Investors category: 50% of the total size of the IPO is allocated to qualified institutional buyers (QIBs), while 15% of the portion is set aside for non-institutional investors (NIIs). The rest of the 35% is kept for retail individual investors (RIIs).

Proceeds: The company will utilise the proceeds from the issue to augment its capital base to meet future capital requirements arising out of the growth of the business and assets. However, the company will receive any funds from the offer for sale as those will be paid to selling shareholders.

Lead managers: ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company are acting as the book-running lead managers for the IPO. KFin Technologies is the registrar.

Incorporated in January 2008, SBFC is a systemically important, non-deposit non-banking finance company offering Secured MSME Loans and Loans against Gold, with a majority of its r borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working-class individuals.

Among MSME-focused NBFCs in India, the company has one of the highest assets under management (AUM) growth, at a CAGR of 44% in the period from Fiscal 2019 to Fiscal 2023. It has also witnessed healthy disbursement growth, at a CAGR of 40% between Fiscal 2021 and Fiscal 2023.