Jana Small Finance Bank may list at 7% premium to IPO price

Jana Small Finance Bank IPO: Ahead of the listing, the shares were commanding a 4 percent premium in the grey market

The Jana Small Finance Bank stock is expected to list between Rs 440 and Rs 450, a 7-8 percent premium over the issue price, on February 14, analysts have said.

Ahead of the listing, the shares were commanding a 4 percent premium in the grey market, an unofficial ecosystem where shares start trading before the allotment in the IPO and continue till the listing day. Most investors track the grey market premium (GMP) to get an idea of the listing price.

Also Read: Jana Small Finance Bank IPO booked fully: What brokerages say about Rs 570-cr issue?

“Jana Small Finance Bank marked a setback in margins for FY22 in line with general trends for the industry due to the pandemic. It is back on track, as indicated by its financial performance from FY23 onwards. Based on annualised FY24 earnings, the issue appears reasonably priced. We expect the listing to be around Rs 445-455 with a listing gain of around 8 percent,” said Amit Goel, Co-Founder and Chief Global Strategist, Pace 360.

"SFB IPO received a decent 20x subscription and we expect decent listing gains of around 7 percent when it lists on the bourses on February 14,” said Shreyansh V.Shah, Research Analyst, StoxBox.

The bank is growing as it has shifted focus from microfinance loans to expanding its secured loan book, including affordable housing loans, secured business loans, gold loans, MSME loans, and two-wheeler loans, he said.

Also read: Jana Small Finance Bank IPO: 10 things to know about the Rs 570-crore issue

The Rs 570-crore offer, which consisted of a fresh issue of 1.11 crore shares worth Rs 462 crore and an OFS of 26.08 lakh shares worth Rs 108 crore, was subscribed 19.8 times. The price band was fixed at Rs 393-414 a share.

The bank plans to use fresh issue proceeds to bolster its Tier-1 capital base.

Jana SFB is the fourth largest small finance bank in terms of AUM and deposit size. As of September 30, 2023, the bank had 771 banking outlets.

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