Ujjivan Small Finance Bank lists at 59% premium over issue price

Shares of Ujjivan Small Finance Bank made a robust stock market debut on Thursday as the stock got listed at Rs 58 on the BSE, marking a 56.76 per cent premium over its issue price of Rs 37 per share.

The scrip listed at Rs 58.75 on the NSE, a premium of 58.78 per cent over the issue price.

The Rs 750 crore public offer, which was open for subscription during December 2-4, got subscribed more than 165 times at a price band of Rs 36-37 per share. The issue witnessed the highest subscription among all IPOs since January 2018.

Nitin Chugh, MD & CEO, Ujjivan Small Finance Bank told ETNow that strong earnings growth led to strong response from investors. “We have been investing in tech as well as digital. The company stands out among other small finance banks,” he added.

Ujjivan Small Finance attracted huge subscriptions from all categories of investors because of its attractive valuation and strong asset quality, according to Santosh Meena, Senior Analyst, TradingBells.

The category meant for qualified institutional buyers (QIBs) was subscribed 111 times, non-institutional investors (NIIs) category witnessed a subscription of 473 times, while the same for retail investors stood at over 49 times.

“Apart from attractive valuations, the rural penetration of its promoter will help it to expand its banking services to PAN India,” said Meena.

Kotak Mahindra Capital Company, JM Financial and IIFL Securities managed the offer.

Microfinance lender Ujjivan Financial Services is the holding company of Ujjivan Small Finance Bank.

Anusha Raheja, BFSI Research Analyst at LKP Securities said, “Ujjivan is a play on the MFI growth story. The bank’s IPO was mainly to comply with RBI norms to list within 3 years of receiving a banking license. Ujjivan Financial Services diluted its stake in the bank from 94.4 per cent to 80 per cent post IPO. The promoter stake in the bank has to reduce down further to 40 per cent in the next 2 years time which shall be a hangover in the near-term.”

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