SBFC Finance's Initial Public Offer (IPO) on the second day of subscription saw an overwhelming market response, with the IPO being subscribed 7 times. The Rs 1,025 crore IPO of the non-banking finance company received bids for 94,60,90,080 shares against 13,35,12,817 shares on offer, according to NSE data.
The non-institutional investors' quota in the IPO was subscribed 12.95 times, whereas the portion allocated to Qualified Institutional Buyers (QIBs) was subscribed 6.71 times, the report said. Additionally, the category for Retail Individual Investors (RIIs) saw a subscription rate of 4.93 times, reported PTI.
The IPO comprises a fresh issue of up to Rs 600 crore and an offer-for-sale (OFS) of up to Rs 425 crore owned by Arpwood Partners and Eight45 Services, respectively. The IPO is in a price range of Rs 54-57 per share.
According to a Business Standard report, at the highest end of the price band, the post-dilution valuation of SBFC is estimated to be around Rs 6,066 crore. The report also said that analysts have observed that, at the top-end of the price band, the company's valuation stands at 3.6 times its book value, considering the promising growth opportunities and robust fundamentals of SBFC.
On the first day of public offering on Thursday, SBFC Finance's IPO was fully subscribed. The firm raised a little over Rs 304 crore from anchor investors on Wednesday.
As per the red herring prospectus (RHP), SBFC Finance plans to utilise the net proceeds from the IPO to meet its future capital requirements arising out of the growth of its business and assets. ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company are the managers of the offer.
SBFC Finance is a non-deposit-taking non-banking finance company (NBFC) that specialises in providing secured loans to MSMEs (Micro, Small, and Medium Enterprises) and loans against gold. Its clients mainly consist of entrepreneurs, small business owners, self-employed individuals, salaried employees, and working-class individuals.
(Disclaimer: This report is meant only for information purposes. It should not be treated as a stock recommendation. Reader discretion advised.)