The initial public offering (IPO) of non-banking lender SBFC Finance was subscribed 75.80 times so far on the third and last day of the bidding process on Monday. The issue was booked 7 times on day two.

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The Rs 1,025 crore-initial share sale received bids for 798 crore equity shares against an offer size of 10.53 crore shares, subscription data available with the exchanges showed.

The quota reserved for retail individual investors (RIIs) was subscribed 10.99 times, qualified institutional buyers by 192.89 times and non-institutional investors(NIIS) by 49.09 times. Meanwhile, the portion set aside for employees, who will get Rs 10.25 crore worth of shares, was subscribed 5.87 times.

SBFC Finance is selling its shares in the range of Rs 54-57 a share.

According to market sources, the grey market premium (GMP) of SBFC Finance was Rs 40. The grey market is an unofficial platform for trading in IPO shares and is largely tracked for gauging the listing price.

The Clermont Group and Arpwood Group-backed NBFC are looking to raise Rs 1,025 crore through the IPO, which comprises a fresh issue of shares worth Rs 600 crore, while three Arpwood Group-owned firms want to sell shares worth Rs 425 crore.

The company has also garnered Rs 304.43 crore from anchor investors.

The net proceeds from the issue will be utilised for augmenting SBFC's capital base as it expands the business, the company has said.

Healthy listing gains likely

The IPO is reasonably priced, offering room to investors for healthy listing gains, analysts say.

"SBFC Finance has experienced management and the IPO is fairly priced. Market is also liking the fact that the current mood is in favour of financial companies. Concord Biotech is a very good company, but listing gains may not be good due to aggressive pricing," said Avinash Gorakshakar of Profitmart Securities.

At higher price band of Rs 57, the stock is valued at 2.4 times P/BVPS (price per book value per share) with current book value per share of Rs 23. Factoring the superlative return ratio, FY23 ROA of 3 percent and further improvement post fund raise, LKP Securities believes that SBFC Finance is worth subscribing.

The non-banking finance company will finalise the basis of allotment by August 10 and the shares will be transferred to the demat accounts of eligible investors by August 14.

Refunds will be credited to the accounts of unsuccessful investors by August 11. Shares of the company are proposed to be listed on both NSE and BSE with August 16 as the tentative listing date.

ICICI Securities, Axis Capital and Kotak Mahindra Capital Company are the book-running lead managers to the issue, while KFin Technologies is the registrar.

First Published:Aug 7, 2023 4:32 PM IST