Laxmi India Finance Limited, a non-deposit taking NBFC focused on serving underserved customer segments in India, closed its IPO on 31 July 2025 with a subscription status of 0.75 times. This relatively low interest reflects cautious investor sentiment despite the company’s robust performance and experienced management.

Business Overview

Founded with the mission to reach underserved areas, Laxmi India Finance has built a wide presence with 139 branches as of September 30, 2024, operating in Rajasthan, Gujarat, Madhya Pradesh, and Chhattisgarh. Their loan portfolio includes:

• MSME loans

• Vehicle financing

• Construction loans

• Other diversified financial products

The company focuses on a high-touch, branch-based model, often serving customers in rural and semi-urban areas who are excluded from traditional banking.

IPO Details

The ₹254.26 crore IPO was a Book Built Issue comprising:

• Fresh Issue: 104.53 lakh equity shares worth ₹165.17 crore

• Offer for Sale: 56.38 lakh equity shares aggregating ₹89.09 crore

The price band was fixed between ₹150–₹158, with the upper band valuing the company at ₹825.83 crore in market capitalisation.

• Lot size: 94 shares

• Retail minimum investment: ₹14,852 (1 lot)

• HNI minimum investment: ₹2,07,928 (14 lots)

The company appointed PL Capital Markets Pvt Ltd as the lead manager, with MUFG Intime India Pvt Ltd (formerly Link Intime) as the registrar.

Anchor Investor Participation

Ahead of the IPO, Laxmi India Finance raised ₹75.51 crore from Anchor Investors by allocating 47.79 lakh shares at ₹158 each. This indicated some institutional confidence, though the low retail and HNI participation may be a point of concern for listing performance.

Subscription Status

As of 7:00 PM on 31 July, the IPO was subscribed only 0.75 times, a weak figure that hints at tepid market interest. Despite the company’s stable fundamentals, investors seem hesitant due to market volatility or sectoral risks.

Grey Market Premium (GMP)

The GMP for Laxmi India Finance IPO is reported at ₹13, suggesting a potential listing price of ₹171, or about 8.22% premium over the upper price band of ₹158. However, this is merely indicative and based on unregulated grey market trends, which are speculative and not recommended for investment decisions.

Financial Performance

Laxmi India Finance has demonstrated consistent financial growth:

The company’s Net Worth and profitability have been steadily improving, reflecting robust lending operations and prudent risk management.

Valuation and Ratios

Key metrics indicate a fair valuation:

• Pre-Issue EPS (FY24): ₹8.78

• Post-Issue EPS (FY24): ₹6.89

• Pre-Issue P/E: 17.99x

• Post-Issue P/E: 22.94x

• Industry P/E: ~82x

• ROE (FY24): 15.66%

• RoNW: 15.66%

These ratios suggest that Laxmi India Finance is reasonably priced when compared to industry peers, although investors may seek higher margins of safety in uncertain markets.

IPO Objectives

The primary goal of the IPO proceeds is to strengthen the company’s capital base for onward lending activities, with the breakup as follows:

• ₹177.00 crore for capital augmentation

• Balance for general corporate purposes

The infusion will enable the company to expand its loan book and support growth in newer geographies.

Allotment & Listing Timeline

• Allotment Date: 01 August 2025 (Friday)

• Listing Date (Tentative): 05 August 2025 (Tuesday)

• Stock Exchanges: BSE & NSE

Investors can check their IPO allotment status via the registrar’s website using application number, PAN, or DP ID.

Should You Apply?

While Laxmi India Finance shows strong financials, reasonable valuations, and a growing operational footprint, the lack of overwhelming subscription may indicate limited investor appetite, particularly in the current market climate.

The Grey Market Premium of ₹13 suggests only moderate listing gains, and that too only if demand picks up post-listing. The fact that the IPO didn’t even get fully subscribed adds a layer of listing risk, especially for short-term investors.

Disclaimer

The above analysis is for educational and informational purposes only and does not constitute investment advice. IPO investments are subject to market risks. Kindly consult your financial advisor before investing.

The Upcoming IPOs in this week and coming weeks are BLT Logistics, Bhadora Industries, Highway Infrastructure, Parth Electricals & Engineering, Jyoti Global Plast, Essex Marine, Aaradhya Disposal Industries.

The Current active IPO are Flysbs Aviation, Cash Ur Drive Marketing, Renol Polychem, B.D. Industries (Pune), NSDL, Takyon Networks, Mehul Colours, M&B Engineering, Sri Lotus Developers & Realty.

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