Ujjivan Small Finance Bank IPO Beats IRCTC To Receive Highest Subscription In 2019

Ujjivan Small Finance Bank's initial public offering (IPO) saw the highest subscription for the year 2019. The issue, which was open between 2 and 4 December, was overall subscribed 165.68 times. In fact, it was oversubscribed on the first day itself.

The small finance bank's IPO overtook IRCTC IPO, which in October was subscribed 112 times.

As per data on the stock exchanges, Ujjivan Small Finance Bank IPO received bids for 20,53,66,79,600 shares against the issue size of 12,39,58,333 shares.

The Rs 750-crore was open for subscription at the price band of Rs 36-37 per share. Of the net issue, 75 percent was reserved for Qualified Institutional Buyers (60 percent of QIB to Anchor Investors), 15 percent for non-institutional investors and 10 percent for retail individual investors. Shares worth Rs 75 crore were reserved for eligible shareholders of Ujjivan Financial Services at a Rs 2 per share discount.

Most brokerages had placed a 'subscribe' rating on the issue. "USFB had a steady ride in terms of advances growth along with maintaining asset quality. There was continued focus on garnering retail liability along with building CASA base. We have a SUBSCRIBE recommendation on the stock. Further, at the IPO price band of Rs 36-37, the stock is available at a P/BV of ~2.2x (post issue) at the upper band on H1FY20 basis," ICICI Dorect said.

According to the bank's red herring prospectus, proceeds from the issue will be utilised for augmenting its Tier-1 capital base to meet its future capital requirements and towards meeting the expenses in relation to the issue.