Suryoday Small Finance Bank’s Rs 582.33-crore IPO will open for subscription next week, Wednesday, March 17, 2021. The company has fixed a price band at Rs 303-305 per share of face value of Rs 10 each. The issue will close for subscription on March 19, 2021. Suryoday Small Finance Bank initial public offer comprises fresh issue of 81.50 lakh shares, and an offer-for-sale (OFS) of up to 1.09 crore equity shares. So far, no grey market activity was seen in Suryoday Small Finance Bank shares.
The OFS comprises sale of shares by following shareholders:
* International Finance Corp: Up to 48.37 lakh equity shares
* Gaja Capital Fund II Ltd: Around 20 lakh equity shares
* DWM (International) Mauritius Ltd: 18 lakh shares
* HDFC Holdings Ltd: 7.5 lakh shares
* IDFC First Bank: 1.5 lakh shares
* Americorp Ventures Ltd: 1 lakh shares
* Kotak Mahindra Life Insurance Company: 1.86 lakh shares
* Gaja Capital India AIF Trust: 1.06 lakh shares
Suryoday Small Finance Bank: Bid lot size, registrar
Investors can make bids for a minimum of 49 equity shares and in multiples thereafter, translating to a minimum investment of Rs 14,945. Not more than 50 per cent of the net issue will be reserved for qualified institutional investors (QIBs), 35 per cent of the portion for retail investors and not less than 15 per cent for non-institutional investors. Along with this, 5 lakh equity shares will be reserved for eligible employees. Also, a discount of Rs 30 per share is also being offered to eligible employees bidding in the employee reservation portion. The book running lead managers to the issue include Axis Capital Ltd, ICICI Securities Ltd, IIFL Securities Ltd, and SBI Capital Markets Ltd. The registrar to the Suryoday Small Finance Bank issue will be Kfin Technologies Private Ltd.
Suryoday Small Finance Bank’s listed peers
The listed industry peers of Suryoday Small Finance Bank are Ujjivan Small Finance Bank, CreditAccess Grameen Ltd, Spandana Sphoorty Financial Ltd, Bandhan Bank Ltd and AU Small Finance Bank. The highest industry P/E stands at 48.34x (AU Small Finance Bank) and the lowest at 12.14x (Spandana Sphoorty Financial Ltd), therefore, the average industry P/E is 25.15x. The Small Finance Bank has proposed to utilize the net proceeds from the fresh issue towards augmenting the Suryoday Small Finance Bank’s Tier – 1 capital base to meet its future capital requirements. Suryoday Small Finance Bank posted a profit of Rs 54.8 crore for the quarter ended December 31, 2020.
Suryoday Small Finance Bank issue price inline with unlisted market
This year has been very difficult for the financial sector, especially for SFBs due to the pandemic-COVID-19, says Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares. However, Suryoday is amongst the leading SFBs in India in terms of NIMs, RoA, yields and deposit growth and the lowest cost-to-income ratio. Abhay Doshi told Financial Express Online that the issue looks reasonably priced. The P/BV was 2.28 which seems to be reasonable with respect to its peers on the basis of data as on Dec, 2020. The management quality of the company is very good and it also has good backing from institutional investors. The issue price is almost in-line with the unlisted (Pre-IPO) market.