Skip to main content

Equitas Small Finance Bank fully subscribed on final day, QIB portion 1.6 times

ICICI Direct also has a subscribe recommendation on the stock as Equitas Small Finance Bank had strong advances growth along with it maintaining the asset quality.

The Rs 518 crore public offer of Equitas Small Finance Bank has been fully subscribed on October 22, the final day of bidding. The IPO has seen tepid response so far despite attractive valuations.

The offer has received bids for 12.95 crore equity shares against offer size of 11.58 crore equity shares, the subscription data available on the exchanges showed. The offer size excluded anchor book, through which company had raised Rs 140 crore on October 19.

This is the third public issue in small finance bank segment after AU Small Finance Bank and Ujjivan Small Finance Bank.

The portion set aside for qualified institutional investors has been subscribed 1.6 times, and that of non-institutional investors 6.3 percent and retail investors 1.58 times.



The bank also reserved a portion for its employees and promoter Equitas Holdings' shareholders which subscribed 1.08 times and 27 percent.

The public issue consists of a fresh issue of Rs 280 crore and an offer for sale of 7.2 crore equity shares by Equitas Holdings to comply with shareholding norms set by the Reserve Bank of India. The issue price has been fixed at Rs 32-33 per share.

As per the mandate, Equitas Holdings has to reduce its shareholding in Equitas Small Finance Bank up to 40 percent till September 2021. Hence, Equitas Holdings could be looking for merger & acquisition and bulk stake sale, and it is also in the process of seeking principle approval from RBI for its merger with the bank.

The IPO launch has been delayed and the issue size has also been reduced to little over Rs 500 crore due to current market conditions and adequate funds with the bank.

Equitas Small Finance Bank is one of the leading small finance banks in terms of its presence and asset under management. It will utilise the net proceeds from the fresh issue towards augmenting Tier I capital base to meet its future capital requirements.

"Past good performance has built the growth drivers and provides better prospects for the bank's performance in the future," said KR Choksey which has a long-term positive view on the stock and recommend subscribe for the issue.

"The bank is being issued at a valuation of around 1.23x P/BV at the upper price band of Rs 33 as on Q1 FY21," the brokerage added.

ICICI Direct also has a subscribe recommendation on the stock as Equitas Small Finance Bank had strong advances growth along with it maintaining the asset quality."Unserved and underserved customers as target offer a vast opportunity for business growth."

Equitas Small Finance Bank is the largest SFB in India in terms of number of banking outlets, and the second-largest SFB in India in terms of AUM and total deposits as on FY19. As of June 2020, the bank had 856 banking outlets and 322 ATMs spread across 17 states and union territories in India.

It has a diversified portfolio with advances growing at 34 percent CAGR from FY18-20 to Rs 13,747 crore and during the same period, deposits grew at 39 percent CAGR to Rs 10,788 crore. Asset quality has remained steady with gross non-performing assets ratio at 2.68 percent and net non-performing assets ratio at 1.48 percent as on June 2020.

Comments

Post a Comment

Popular posts from this blog

Panacea Biotech shares hit 5% upper circuit after dengue vaccine completes phase I & II study

DengiAIl induced robust neutralising antibody responses against all the four dengue virus serotypes, the company has said in an exchange filing. Panacea Biotech share price hit 5 percent upper circuit on the BSE on September 24 after the company completed phases I and II study of its dengue vaccine candidate DengiAIl. "Panacea Biotec Ltd. is delighted to announce the successful completion of its Phase I/II study to evaluate the safety and immunogenicity of its vaccine, DengiAll, a single-dose liveattenuated tetravalent vaccine," the company said in an exchange filing. Live-attenuated vaccines contain weakened bacteria or viruses that trigger an immune response but do not cause disease. The company said DengiAIl induced robust neutralising antibody responses against all the four dengue virus serotypes. DengiAIl has been found to be safe and well-tolerated with no serious adverse effects, the company said. After a single-dose, more than 80 percent of the participants ...
Post a Comment
Read more

Taking Stock | Profit-booking pulls Nifty below 14,450; Sensex drops 549 points

  All the sectoral indices ended in the red with IT and PSU bank indices falling 2 percent each. The market remained under pressure on January 15 on the back of profit-booking across sectors amid weak global cues. At close, the Sensex was down 549.49 points or 1.11% at 49,034.67, and Nifty was down 161.90 points or 1.11% at 14,433.70. "The market witnessed profit-booking and following global trends. Nifty continues to resist 14,600 and has taken a dip towards 14,360. If the market closes below 14,380 levels, we might see a correction till the levels of 14,180-14,200. Momentum indicators like RSI, MACD are indicating a small correction in the markets," said Ashis Biswas, Head of Research at CapitalVia Global Research. All the sectoral indices ended in the red with IT and PSU bank falling 2 percent each. Broader markets performed in line with the main indices with BSE Midcap and Smallcap indices falling 1 percent each. Tech Mahindra, GAIL, HCL Tech, Wipro and ONGC...
Post a Comment
Read more

Similar to 2020, D-Street is at record high ahead of Budget 2021; will history repeat itself?

  Experts are of the view that a repeat of 2020 or what happened in March might not be possible but some consolidation cannot be ruled out. Back in March when everyone wanted to write-off 2020 from their books, hope and liquidity supported markets and investor sentiment. Nobody thought that after touching a 3-year low in March 2020, benchmark indices would give double-digit returns by the end of the year. The S&P BSE Sensex and Nifty50 rallied by about 15 percent in 2020 and the big outperformance came from the small and midcap stocks. The rally is still continuing in 2021. The S&P BSE Sensex, which climbed Mount 49K, is up over 3 percent while the Nifty50 is up over 4 percent so far in January. Sensex scaling the 49,000-mark and Nifty50 touching 14,500 levels ahead of the Budget 2021 could make anyone cautious about the strength of the rally. Back in January 2020, both Sensex and Nifty touched fresh highs ahead of Budget, and then the market fell like a pack of cards. The ...
Post a Comment
Read more