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Last Updated : Dec 02, 2019 05:30 PM IST | Source:

Ujjivan Small Finance Bank IPO subscribed 1.62 times on Day 1, retail portion by 8.6x

The shareholding of Ujjivan Financial Services in the bank would reduce to 83.3 percent post this issue.

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The public issue of Ujjivan Small Finance Bank (USFB) has been subscribed 1.62 times on December 2, the first day of bidding.

The offer has received bids for 20.14 crore equity shares against IPO size of 12.39 crore shares (excluding anchor portion), the exchanges data showed.

The portion set aside for retail investors has been oversubscribed by 8.6 times while the reserved category of non-institutional investors subscribed 42 percent and that of qualified institutional buyers 23 percent.


Ujjivan SFB also reserved some portion worth Rs 75 crore for shareholders of Ujjivan Financial Services which have been subscribed 72 percent.

Here are 10 things to know before subscribing the issue

The shareholders of Ujjivan Financial Services will get shares at a discount of Rs 2 per share to the final issue price. Ujjivan Financial Services is the promoter of Ujjivan Small Finance Bank.

"Notwithstanding some disruption from demonetization, USFB has demonstrated satisfactory progress on franchise development since commencing operations on February 1, 2017. We estimate its return on assets/return on equity to stabilize at 2.4 percent/20 percent in the long run. In this context, IPO pricing is attractive as it values the bank at 2.25x post-money P/BV and 1.8x FY21E P/BV," said Yes Securities which advised subscribing the issue.

The shareholding of Ujjivan Financial Services in the bank would reduce to 83.3 percent post this issue.

Ujjivan Small Finance Bank IPO – Small is beautiful!

Yes Securities said henceforth the key thing to monitor would be the steps taken towards reducing promoter shareholding to 40 percent by January 2022 and RBI's stance on reverse merger after completion of bank's five years of commercial operations.

The public issue comprises a fresh issue of Rs 750 crore, will close on December 4. The company has fixed a price band at Rs 36-37 per share for the IPO.

Ujjivan Bank already received Rs 303.75 crore from 18 anchor investors including Government of Singapore, Goldman Sachs India, HDFC Life Insurance Company, Monetary Authority of Singapore, CX Partners Fund, Aberdeen, Bajaj Allianz Life Insurance Company, Sundaram Mutual Fund, ICICI Prudential etc.

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First Published on Dec 2, 2019 12:06 pm
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