At 1:30 pm, the IPO had received bids for 20,00,13,750 shares compared with the issue size of 11,58,50,001 shares, according to data available with the NSE. Qualified institutional buyers’ (QIB) quota was subscribed 1.8 times.
The IPO comprises a fresh issue of Rs 280 crore and an offer for sale of 7,20,00,000 shares by the parent company Equitas Holdings. 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 fresh issue.
The shares of Equitas Small Finance Bank, which has raised Rs 139.68 crore from anchor investors, is likely to be listed by November 2 on both NSE and BSE. The basis of allotment is expected to be finalised by October 27 and shares will be credited in the demat account of successful applicants by the 29th.
Most analysts have recommended investors to subscribe to the IPO with a long-term view. However, those looking for listing gains can skip the issue, believe some analysts.
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.
Quantum Securities noted that the SME/MFI businesses are facing various challenges at operating level 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 expectation of improvement in performance from FY22E onwards, we recommend investors to ‘Subscribe’ to the issue from a long term perspective,” Quantum Securities said in a note.
Emkay Global Financial Services recommended investors to subscribe to the IPO. The brokerage said it has a ‘buy’ rating on the holding company Equitas Holdings Ltd with target price of Rs 64 for its superior asset diversification, reasonable liability profile, better management pedigree, healthy return ratios and reasonable valuations.