The SBFC Finance IPO, valued at Rs 1,025.00 crores, comprises a blend of fresh issue worth Rs 600.00 crores and an offer for sale totaling Rs 425.00 crores
Bidding for SBFC Finance IPO commenced on August 3, 2023, concluding on August 7, 2023. Allotment results were confirmed by Thursday, August 10, 2023. Subsequently, SBFC Finance shares were listed on both the BSE and NSE on August 16, 2023.
The IPO price range for SBFC Finance is ₹54 to ₹57 per share, with a minimum lot size of 260 shares. Retail investors need a minimum investment of ₹14,820. sNII must invest in a minimum of 14 lots (3,640 shares), totaling ₹207,480, while bNII must invest in at least 68 lots (17,680 shares), totaling ₹1,007,760.
The offering encompasses a reservation of up to 1,863,636 shares designated for employees, provided at a discounted rate of Rs 2 compared to the issue price.
ICICI Securities Limited, Axis Capital Limited, and Kotak Mahindra Capital Company Limited serve as the book running lead managers for the SBFC Finance IPO, with Kfin Technologies Limited appointed as the registrar for the issue.
OBJECTIVE OF IPO
The Offer includes a Fresh Issue of Equity Shares worth ₹7,500 million by the Company and an Offer for Sale of Equity Shares worth ₹4,500 million by the Promoter Selling Shareholders, with each seller receiving their share of proceeds after deducting expenses and taxes.
The Company plans to use the Net Proceeds to strengthen its capital base for future growth requirements. Additionally, it anticipates advantages such as listing benefits, enhanced brand reputation, and the creation of a public market for its Equity Shares in India.
As an NBFC, registered with the RBI, offering Secured MSME Loans and Loans against Gold the company is subject to regulations relating to capital adequacy, determining minimum amount of capital must held as a percentage of the risk-weighted assets on balance sheet and of the risk adjusted value of off-balance sheet items.
As per capital adequacy norms by RBI, Company is required to have a regulatory
As of March 31, 2022
December 31, 2022,
The Net Proceeds are proposed to be utilized for increasing capital base. The company anticipates that the Net Proceeds will be sufficient to satisfy Company’s Tier- I capital requirements.
The object of the Issue is to augment the capital base of the Company. Accordingly, It intend to utilize the Net Proceeds to meet future capital requirements, which are expected to arise out of growth of our business and assets.
Company will temporarily invest the Net Proceeds in deposits in one or more scheduled commercial banks included in the Second Schedule of Reserve Bank of India Act, 1934 as may be approved by the Board.
SBFC FINANCE IPO Details |
|||||||||||
IPO Date | August 03, 2023 to August 07, 2023 | ||||||||||
Listing Date | August 16, 2023 | ||||||||||
Face Value | ₹10 per share | ||||||||||
Price | 54-57 | ||||||||||
Lot Size | 260 shares | ||||||||||
Total Issue Size | 1025 | ||||||||||
Fresh Issue | [.] shares (aggregating up to ₹600.00 Cr) | ||||||||||
Offer for Sale | [.] shares of ₹10 (aggregating up to ₹425.00 Cr) | ||||||||||
Issue Type | Book Built Issue IPO | ||||||||||
Listing At | NSE, BSE | ||||||||||
Share holding pre issue | 958,908,906 | ||||||||||
Share holding post issue |
SBFC FINANCE IPO Lot Size |
|||||||||||
Application | Lots | Shares | Amount | ||||||||
Retail (Min) | 1 | 260 | ₹14,820 | ||||||||
Retail (Max) | 13 | 3380 | ₹192,660 | ||||||||
S-HNI (Min) | 14 | 3,640 | ₹207,480 | ||||||||
S-HNI (Max) | 67 | 17,420 | ₹992,940 | ||||||||
B-HNI (Min) | 68 | 17,680 | ₹1,007,760 |
SBFC FINANCE IPO Timeline (Tentative Schedule) |
|||||||||||
IPO Open Date | Thursday, August 3, 2023 | ||||||||||
IPO Close Date | Monday, August 7, 2023 | ||||||||||
Basis of Allotment | Thursday, August 10, 2023 | ||||||||||
Initiation of Refunds | Friday, August 11, 2023 | ||||||||||
Credit of Shares to Demat | Monday, August 14, 2023 | ||||||||||
Listing Date | Wednesday, August 16, 2023 | ||||||||||
Cut-off time for UPI mandate confirmation | 5 PM on August 7, 2023 |
SBFC FINANCE IPO Reservation |
|||||||||||
Investor Category | Shares Offered | Reservation % | |||||||||
Anchor Investor Shares Offered | 53,407,893 (29.69%) | ||||||||||
QIB Shares Offered | 35,605,261 (19.79%) | N/A | |||||||||
NII (HNI) Shares Offered | 26,703,948 (14.84%) | ||||||||||
bNII > ₹10L | 17,802,632 (9.90%) | 4,890 | |||||||||
sNII < ₹10L | 8,901,316 (4.95%) | 2,445 | |||||||||
Retail Shares Offered | 62,309,210 (34.64%) | 239,650 | |||||||||
Employee Shares Offered | 1,863,636 (1.04%) | NA | |||||||||
Total Shares Offered | 179,889,948 (100%) |
SBFC FINANCE IPO Promoter Holding |
|||||||||||
Share Holding Pre Issue | 78.83% | ||||||||||
Share Holding Post Issue | 64.03% |
SBFC FINANCE IPO Subscription Status |
|||||||||||
Investor Category | Shares Offered | Shares Bid For | No oF Times Subscribed |
A systemically important, non-deposit taking non-banking finance company (“NBFC-ND-SI”) offering Secured MSME Loans and Loans against Gold, with a majority of our borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working-class individuals. It has achieved remarkable AUM growth at a CAGR of 40% from Fiscal 2019 to Fiscal 2022 (Source: CRISIL Report) and witnessed strong disbursement growth at a CAGR of 39% during the same period (Source: CRISIL Report). Despite approximately 14.52 million MSMEs registered on UDYAM as of February 28, 2023, there remains a substantial number of unregistered MSMEs in India without access to organized finance (Source: CRISIL Report).
Competitive Strengths:
Business Operation: An NBFC-ND-SI, headquartered in Mumbai, India, offering Secured MSME Loans and Loans against Gold. Received registration from the RBI on September 24, 2008.
Branch Network: An extensive network of 137 branches, as of December 31, 2022, spread across 16 states and two union territories, and approximately 122 districts across India, with Karnataka, Uttar Pradesh, Maharashtra and Telangana being the key states.
Competitors: Compete with players in MSME finance such as Vistaar Finance, Veritas Finance, AU Small Finance Bank and the non-home segment of affordable housing finance companies. (Source: CRISIL Report), and Fedbank Financial Services, Manappuram Finance, Muthoot Fincorp and Muthoot Finance in the Loan against Gold segment. (Source: CRISIL Report)
Macroeconomic scenario
World economy fighting inflation surge post COVID-19 with Indian economy facing volatile commodity prices and tightening of liquidity: The global economy is witnessing tightening monetary conditions in most regions. According to IMF, a broad based and sharper than expected slowdown with high inflation is being faced across the globe. As per the IMF (World Economic Outlook Update –January 2023), global growth prospects are estimated to fall from 3.4% in 2022 to 2.9% in 2023 and then witness an increase in 2024 to 3.1%, the impact of which is expected to be witnessed in the Indian economy as well.
Russia - Ukraine war slowed global recovery; but India expected to remain one of the fastest growing economies: The IMF too estimates India’s GDP to grow by 6.8% in calendar year 2022 due to its broad range of Fiscal, monetary and health responses. However, IMF projects the growth to slow down to 6.1% in 2023.
Indian economy to be a major part of world trade: Along with being one of the fastest growing economies in the world, India ranked sixth in the world in terms of nominal GDP in calendar year 2021. In terms of purchasing power parity (“PPP”), India is the third largest economy in the world, only after China and the United States.
Financial conditions begin to tighten with mounting inflation: RBI’s Monetary Policy Committee raised policy rates by 40 bps in May 2022. This was followed by 50 bps in June 2022, 50 bps in August 2022, 50 bps in September 2022, 35 bps in December 2022 and another hike of 25 bps in February 2023, thus bringing the repo rate to 6.5%, standing deposit facility (“SDF”) to 6.25% and marginal standing facility (“MSF”) to 6.75%. The hike in interest rate can be seen as a response to both domestic elevated inflation and spill-over risks arising out of aggressive monetary tightening by major central banks. The MPC expects CPI inflation to remain between the 2% - 6% tolerance range and above the medium-term target of 4%.
Key growth drivers
RISK FACTORS FOR THE ISSUE:
Period Ended | 31 Mar 2023 | 31 Mar 2022 | 31 Mar 2021 |
---|---|---|---|
Reserve of Surplus | |||
Total Assets | 5,746.44 | 4,515.03 | 4,231.19 |
Total Borrowings | 3,745.83 | 2,948.82 | 2,772.55 |
Fixed Assets | 34.2 | 35.7 | 39.3 |
Cash | 400.45 | 335.29 | 341.37 |
Net Borrowing | 3345.83 | 2613.527 | 2431.13 |
Revenue | 740.36 | 530.70 | 511.53 |
EBITDA | |||
PAT | 149.74 | 64.52 | 85.01 |
EPS | 1.71 | 0.81 | 1.09 |
Key Performance Indicator |
|||||||||||
KPI | Values | ||||||||||
EPS Pre IPO (Rs.) | 1.25 | ||||||||||
EPS Post IPO (Rs.) | - | ||||||||||
P/E Pre IPO | 40.41 | ||||||||||
P/E Post IPO | - | ||||||||||
ROE | 9.93% | ||||||||||
ROCE | - | ||||||||||
P/BV | 2.96 | ||||||||||
Debt/Equity | 2.2 | ||||||||||
RoNW | 7.97% |
SBFC FINANCE Limited IPO Peer Comparison |
|||||||||||
Company Name | EPS | ROCE | ROE | P/E (x) | P/Bv | Debt/Equity | RoNW (%) | ||||
AAVAS Financiers Ltd | 60 | 9.51% | 14.1% | 22.1 | 2.98 | 3.19 | 9.51% | ||||
Home First Finance Company India Ltd | 32.5 | 10.3% | 13.5% | 27.6 | 4.06 | 3.08 | 10.3% | ||||
Aptus Value Housing Finance India Ltd | 11.7 | 14.6% | 16.1% | 26.5 | 4.36 | 1.22 | 14.6% | ||||
AU Small Finance Bank Ltd | 23.8 | 7.39% | 15.4% | 23.7 | 3.42 | 6.89 | 7.39% | ||||
Five-Star Business Finance Ltd | 26.4 | 14.4% | 15% | 26.6 | 4.31 | 1.02 | 14.4% | ||||
SBFC FINANCE Limited | 1.25 | - | 9.93% | 40.41 | 2.96 | 2.2 | 7.97% |
SBFC Finance Limited
103, 1st Floor, C&B Square, Sangam Complex,
Andheri Kurla Road, Village Chakala,
Andheri (East), Mumbai - 400 059
Phone: 022 6787 5344
Email: complianceofficer@sbfc.com
Website: http://www.sbfc.com/
Kfin Technologies Limited
KFintech, Tower-B, Plot No 31 & 32, Gachibowli, Hyderabad
Website: https://kosmic.kfintech.com/ipostatus/
Phone: 04067162222, 04079611000
Email: Sbfc.ipo@kfintech.com
SFL, a financial services provider for MSMEs, exhibited steady top-line growth but faced a bottom-line setback in FY22. It aims to attract informed, cash-surplus, risk-seeking investors for its IPO filed in March 2023, targeting Rs. 1200 cr. with Rs. 750 cr. fresh equity and Rs. 450 cr. OFS. Pre-IPO placement reduced fresh issue quantum by Rs. 150 cr. and OFS by Rs. 25 cr. Despite recent MSME NPA concerns post-pandemic, SFL maintains its benchmarks with a maximum ticket size of Rs. 30 lakhs, aiming to carve a niche in small-ticket financing. FY23 showed improvement financially with total income/net profit at Rs. 732.81 cr. / Rs. 149.74 cr., though no dividends were paid.
Option Trading with CA Abhay
Equity Investment with CA Abhay
FNO Stocks with CA Abhay
Stock Market Masterclass
Equity Trading with CA Abhay
Equity Investment with CA Abhay
Stock Market Masterclass
Equity Trading with CA Abhay
Option Trading with CA Abhay
FNO Stocks with CA Abhay
Copyright @2020 Design & Developed by Info Web Software