Usha Financial Services, a prominent non-banking finance company (NBFC) registered with the Reserve Bank of India as an NBFC-ICC (Investment & Credit), has announced its IPO amidst growing interest in the sector. With over 9 years of lending experience, the company focuses on providing tailored financial solutions to fellow NBFCs, corporates, MSMEs, and individual clients, with a notable emphasis on women entrepreneurs and Electric Vehicle (EV) financing.

The Usha Financial Services IPO, which is a Book Built Issue amounting to ₹98.44 Crores, consists entirely of a Fresh Issue of 58.60 Lakh Shares. The subscription period opened on October 24, 2024, and will close on October 28, 2024. The shares are expected to be listed on the NSE SME platform, with a tentative listing date of October 31, 2024. The share price band is set at ₹160 to ₹168 per equity share, giving the company a market capitalization of approximately ₹365.19 Crores at the upper price band.

For retail investors, the minimum investment is required for 800 shares, which amounts to ₹1,34,400. High-Net-Worth Individuals (HNIs) must invest in at least 2 lots, totaling 1,600 shares or ₹2,68,800. The book-running lead managers for this IPO are UNISTONE CAPITAL PRIVATE LIMITED and NARNOLIA FINANCIAL SERVICES LIMITED, while SKYLINE FINANCIAL SERVICES PRIVATE LIMITED serves as the registrar.

As of October 28, 2024, the Grey Market Premium (GMP) for Usha Financial Services stands at ₹0, indicating a cautious market sentiment regarding the listing. It's important to note that no real trading occurs based on GMP, as it relies on unregulated demand and supply dynamics, which do not reflect the actual market price.

The live subscription status for Usha Financial Services shows a significant demand, with the IPO having been subscribed 5.14 times on its final day. This reflects investor confidence and interest in the company's offerings and financial health.

On the allotment date, which is scheduled for October 29, 2024, investors can check their allotment status online by visiting the registrar's website and entering their application details.

The funds raised from the Usha Financial Services IPO will be strategically allocated to augment the company's capital base, meet general corporate purposes, and cover issue expenses. Specifically, the proceeds are earmarked as follows:

1. ₹7,000 Lakhs for augmenting the capital base.
2. Additional funds to cover general corporate purposes.
3. Funds allocated for issue expenses.

From a financial perspective, Usha Financial Services reported revenues of ₹2,681.26 lakhs for the quarter ended September 30, 2024, with EBITDA of ₹1,773.94 lakhs and a Profit After Tax of ₹504.16 lakhs. For the fiscal years preceding this quarter, the financial performance has shown growth, with a pre-issue Earnings Per Share (EPS) of ₹8.64 and a post-issue EPS projected at ₹6.18. The pre-issue P/E ratio stands at 19.44x, while the post-issue P/E ratio is 27.18x, compared to the industry average of 45.47x. This suggests that the IPO is fairly priced relative to its peers.

However, the Grey Market Premium indicating potential listing gains of 0% raises concerns for conservative investors. Given these factors, it may be advisable for risk-averse investors to approach the Usha Financial Services IPO cautiously, particularly if seeking significant listing gains or long-term investment opportunities.

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