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Why investors should give the IPO of Equitas SFB a pass

While the headline valuation is reasonable, Equitas SFB's IPO does not quite measure up for multiple reasons

October 20, 2020 / 04:01 PM IST
Why investors should give the IPO of Equitas SFB a pass

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PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights - IPO to comply with a regulatory diktat - Huge discount in the stock price of Equitas Holding - Moratorium book declining and collection efficiency improving - No clarity on the book, post August - Diversification of asset and strength in the liability book - We would recommend adding the stock in post listing volatility Equitas Small Finance Bank (ESFB) commenced its journey as an NBFC and converted into a small finance bank in September 2016. The holding company of the bank, namely Equitas Holding, is...

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