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Subscribe to Suryoday Small Finance Bank: LKP Research

LKP Research has come out with its report on Suryoday Small Finance Bank. The research firm has recommended to ''Subscribe'' the ipo in its research report as on March 14, 2021.

March 16, 2021 / 01:13 PM IST
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LKP Research IPO report on Suryoday Small Finance Bank

SURYODAY SFB commenced operations as an NBFC and for over a decade has been serving customers in the unbanked and under-banked segments in India and promoting financial inclusion. Pursuant to receipt of the RBI Final Approval, it started operations as a “Small Finance Bank” on January 23, 2017. The bank is among the leading SFBs in India in terms of Net Interest Margins, Return on Assets, Yields and deposit growth and had the lowest Cost-to-Income ratio among SFBs in India in Fiscal 2020. Prior to the operations as an SFB, it operated as an NBFC– MFI carrying out microfinance operations and operated the joint liability group-lending model for providing collateral-free, small ticket-size loans to economically active women belonging to weaker sections.

Valuation and Outlook

At higher price band (₹305), the stock is valued at 2.28(x) P/BVPS with current book value per share of ₹133.5. Factoring the good return ratios, FY20 ROA/ROE of 11.3%/2.5%, we believe that Suryoday Small Finance Bank Limited is worth subscribing. Thus we recommend SUBSCRIBE.

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