The Rs 518 crore initial public offer (IPO) by Equitas Small Finance Bank (SFB) was subscribed 48 percent on Day 2 of the bidding process so far while the retail quota was fully subscribed. The issue was subscribed to 39  percent by the end of the first day.

                             

By 11.47 am, the IPO had received bids for 5,58,34,200 shares compared with the issue size of 11,58,50,001 shares. Bidding was seen by retail individual investors (RIIs), whose quota was subscribed 1.04 times at the time of writing this report.

The offer included a fresh issue of shares worth Rs 280 crore and an offer for sale of 7,20,00,000 shares by the parent company. The IPO is being sold in the price band of Rs 32-33 per share and at the upper limit of this price band, the IPO is asking for an adjusted price to book value P/BV of 1.26 times, post considering the fresh issue.

ICICI Securities said the company had strong advances growth along with maintaining asset quality. “Unserved and underserved customers as targets offer a vast opportunity for business growth. We have a ‘Subscribe’ recommendation on the stock,” said the broker.

Some analysts, however, believe you should skip the issue if you are looking for listing gains.


Quantum Securities noted that the SME/MFI businesses are facing various challenges at the operating levels in wake of the current pandemic and the interest waiver issue for which a PIL (public interest litigation) has been filed in the Supreme Court (SC). It, thus, ruled out listing gains.


“So based on the expectation of improvement in performance from FY22E onwards, we recommend investors to ‘Subscribe’ to the issue from a long-term perspective,” Quantum said in a note.