The Utkarsh Small Finance Bank (SFB) initial public offering has been subscribed 16.2 times on the second day of bidding on July 13, stock exchange data showed.
The issue received bids for 195 crore shares against an issue size of 12 crore shares. The IPO will close for bidding on July 14. The Rs 500 crore issued, priced in the Rs 23-25 band, is a mix of new issue of shares and sale by existing shareholders.
The retail portion of the issue has been subscribed 36.66 times and the employee portion of the issue 8.48 times.
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The part set aside for qualified institutional buyers was subscribed 3.88 times. The non-institutional portion of the IPO has been subscribed 27.72 times, with bids received for 89.47 crore shares, against the reserved portion of 3.2 crore shares.
Several brokerage firms have been upbeat on the prospects of the bank before the launch of the IPO. Reliance Securities recommended 'subscribe' to the public issue because it believes that the bank is in constant efforts to improve its business with deeper insights into customer trends and develop customised products for its various user segments.
Nirmal Bang in its IPO note has said that Utkarsh has managed to reduce its exposure to the unsecured micro banking segment from 82 percent in FY21 to 66 percent in FY23 which has derisked its business model. "We expect this trend to continue," the broking firm said.
BP Wealth in its report on the bank said Utkarsh has strong asset quality and consistent financial performance. The firm recommends 'subscribe' on the back of a robust growth story.
Utkarsh SFB was incorporated as an NBFC in FY10 with core focus on microfinance loans to underserved segments and in particular in Uttar Pradesh and Bihar.
The public issue involves a new offering of equity shares totalling up to Rs 500 crore. The company plans to use the net proceeds from the offering to strengthen the bank's Tier-1 capital base in order to meet future capital needs resulting from the growth in its loans and advances.
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