Suryoday Small Finance Bank IPO: The IPO of Suryoday Small Finance Bank has opened for investment on 17 March i.e. Wednesday. The company plans to raise about Rs 582 crore through an IPO. The company is issuing 1,90,93,070 shares under the issue. One can invest in it from March 17 to March 19. Suryoday Small Finance Bank has fixed the price band for the IPO at Rs 303-305 per share. The face value of each share is 10 rupees. While the lot size for this is 49 shares.
Fourth NBFC to bring IPO
Suryoday Small Finance Bank is the fourth NBFC company to launch an IPO. Earlier, AU Small Finance Bank, Equitas Small Finance Bank and Ujjivan Small Finance Bank have brought IPOs. The book running lead managers to the company’s issue are Axis Capital, ICICI Securities and SBI Capital Markets.
Long term investment advice
Religare Broking’s VP-Research, Ajit Mishra Says that one should invest in Suryoday Small Finance Bank for long term. He says that due to Corona virus epidemic, the banking sector has been deeply affected. The asset quality of many banks has deteriorated and their profits have also been affected. PSUs and small finance banks are more affected. In such a situation, challenges can be seen in the near term at Suryoday Small Finance Bank. Although collections and deposits are improving now. But the long-term outlook looks better. At present, more business of the bank comes from Maharashtra, Tamil Nadu and Odisha. But the focus of the bank is to increase the distribution channel and also to increase the geographical presence.
Brokerage House MK Global Says that the capital ratio of Sunrise Small Finance Bank is higher than that of Pierce. However, there are some concerns regarding asset quality. There may be pressure on the bank’s growth in the near term.
LIC will not be privatized, no one will get job from IPO – Government
81.50 lakh equity shares will be issued
Under this issue, the company is issuing 81.50 lakh equity shares and 1,09,43,070 equity shares will be sold under the offer for sale. Under the offer for sale (OFS), International Finance Corporation will sell 43,87,888 equity shares, Gaza Capital Fund II 20,21,952 shares, DWM (International) Mauritius 18,89,845 shares and HDFC Holdings 7.5 lakh shares.
Apart from this, the other shareholders of the bank, IDFC First Bank 15 lakh shares, Americorp Ventures 1 lakh shares, Kotak Mahindra Life Insurance Company 1,86,966 shares and Gaza Capital India AIF Trust Small Finance Bank have reserved 5 lakh shares for its employees. The employees of the bank will get an IPO at a 30 percent discount. Will sell 1,06,419 equity shares.
Financial situation
As of March 2020, the loan portfolio of Suryoday Small Finance Bank was Rs 3,711 crore. 76 percent of the customers in this are women. The bank offers commercial vehicle loans, affordable housing loans and loans to small and medium businesses. The bank had a net interest margin of 11.92 per cent in the fiscal year 2020. By December 2020, the loan portfolio of Suryoday Small Finance Bank has increased to Rs 3900 crore.