ESAF Small Finance Bank makes stellar debut, stock lists at 20% premium to IPO price

ESAF Small Finance Bank’s public offer was subscribed 73.15 times

ESAF Small Finance Bank stock made a stellar debut, listing at 19 percent premium to the IPO price on November 10. The stock opened at Rs 71 on the NSE and Rs 71.9 on the BSE against the issue price of Rs 60.

Ahead of the listing, the shares were trading at a 26 percent premium in the grey market. The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and until the listing day. Most investors track the grey market premium (GMP) of a stock to get an idea of the listing price.

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ESAF Small Finance Bank’s public offer was subscribed 73.15 times with bids at 422.29 crore equity shares against an issue size of 5.77 crore shares. Qualified institutional buyers (QIBs) were at the forefront, buying 173.52 times the allotted quota, while the portions set aside for high net-worth individuals (HNIs) and retail investors were subscribed 84.37 times and 16.97 times, respectively.

The price band for the issue, which opened on November 3 and closed on November 7, was fixed at Rs 57-60 per share. Through the IPO, the company raised Rs 463 crore. The public offer comprised a fresh issue of 6.51 crore shares worth Rs 390.7 crore and an offer-for-sale of 1.2 crore shares worth Rs 72.3 crore.

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The company will use the net proceeds from the issue to augment the bank's Tier–I capital base to meet future capital requirements and to increase business, which is primarily onward lending.

The book-running lead managers to the issue were ICICI Securities, Dam Capital Advisors and Nuvama Wealth Management while Link Intime India was the registrar. The promoters of the company are Kadambelil Paul Thomas and ESAF Financial Holdings Private Limited.

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