ESAF Small Finance Bank's initial public offering (IPO), which ran from November 3 to November 7, has concluded successfully with a robust response from investors. The IPO was oversubscribed 1.74 times, with participation seen across all investor categories. High-net-worth individuals bought 2.44 times their quota while retail investors bid for nearly twice their portion. Qualified institutional buyers subscribed to 90% of their share.
The Kerala-based bank aimed to raise Rs 463 crore ($6.2 million) through the public issue, which included a fresh issue of Rs 390.70 crore worth shares and an offer-for-sale (OFS) of Rs 72.30 crore shares by promoters and investors. The IPO was managed by ICICI Securities, DAM Capital Advisors, and Nuvama Wealth Management, with Link Intime India Private Ltd acting as registrar.
On the first day of the IPO, the bank raised Rs 135 crore from anchor investors like Ananta Capital Ventures Fund and ICICI Prudential (LON:PRU) Life Insurance. The price band for the IPO was set at Rs 57-60 per share.
The IPO also entailed a fresh issue of 6,51,16,667 shares (₹390.70 crore) and an OFS of 1,20,50,000 shares (₹72.30 crore) priced at ₹57 to ₹60 per share. Anchor investors absorbed 29.19% of the IPO size affecting QIB Shares Offered with a lock-in period of one month for half the shares and three months for the rest.
ESAF Small Finance Bank plans to use the raised capital to boost its capital adequacy and expand its asset book. Prior to listing, the bank's shares were trading at a premium of around 35 percent in the grey market, indicating a potential listing gain of 33.33%.
The bank's shares are expected to list on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on November 16. After the allotment concludes on November 10, refunds will be processed by November 13, demat credits will be available by November 15. The IPO's success signifies the strong performance indicators of the bank, including substantial assets under management, a high compound annual growth rate (CAGR), and a robust micro loan advances to gross advances ratio.
InvestingPro Insights
Based on the latest InvestingPro data, ESAF Small Finance Bank has shown promising financial metrics that align with its successful IPO. The bank has a market capitalization of 186.06M USD and a P/E ratio of 13.41, indicating that its stock is trading at a relatively low price compared to its earnings. This is further confirmed by the bank's adjusted P/E ratio as of Q2 2023, which stands at 13.1. In terms of revenue, the bank has generated 95.71M USD as of Q2 2023.
InvestingPro Tips reveal that the bank has been demonstrating consistent growth in earnings per share, which can be a positive sign for potential investors. The bank is also trading at a low P/E ratio relative to near-term earnings growth, suggesting that it might be undervalued. Moreover, the bank has been identified as a prominent player in the banking industry, which further supports its strong market position.
For more comprehensive insights and tips, consider exploring InvestingPro's platform, which offers a wealth of data and advice for informed investing. Currently, there are 12 additional InvestingPro Tips related to ESAF Small Finance Bank that could provide further valuable insights for potential investors.
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