Usha Financial Services Limited is a non-banking finance company (NBFC) registered with the Reserve Bank of India as an NBFC-ICC (Investment & Credit), categorized as a non-deposit-taking, non-systematically important entity with over nine years of lending experience. The company primarily focuses on providing lending solutions to fellow NBFCs, corporates, MSMEs (Micro, Small, and Medium Enterprises), and individuals, with a particular emphasis on supporting women entrepreneurs. Additionally, Usha Financial Services has diversified its offerings to include Electric Vehicle (EV) financing.

As it prepares for its upcoming IPO, Usha Financial Services aims to raise ₹98.44 crore through a Book Built Issue, consisting entirely of a Fresh Issue of 58.60 lakh shares. The subscription period is set to open on October 24, 2024, and close on October 28, 2024. The expected allotment date is October 29, 2024, with shares slated for listing on the NSE SME around October 31, 2024.

IPO Details

The price band for the Usha Financial Services IPO is fixed at ₹160 to ₹168 per equity share, leading to a market capitalization of ₹365.19 crore at the upper end of the band. The lot size for this IPO is 800 shares, meaning retail investors will need to invest a minimum of ₹1,34,400. For High-Net-Worth Individuals (HNIs), the minimum investment required is 2 lots (1,600 shares), totaling ₹2,68,800.

UNISTONE CAPITAL PRIVATE LIMITED and NARNOLIA FINANCIAL SERVICES LIMITED are acting as the book-running lead managers, while SKYLINE FINANCIAL SERVICES PRIVATE LIMITED will serve as the registrar for the IPO. SS Corporate Securities Limited is designated as the Market Maker.

Usha Financial Services Limited IPO GMP Today

Currently, the Grey Market Premium (GMP) for the Usha Financial Services IPO is ₹0, indicating that no listing gains are anticipated based on the company's recent financial performance. The GMP reflects the unregulated demand and supply dynamics in the grey market, but it does not provide a reliable indicator of the listing price. This information is presented for educational purposes and should be approached with caution.

Live Subscription Status

The Usha Financial Services IPO will be available for subscription from October 24 to October 28, 2024. Investors can track real-time updates on the subscription status through platforms like the NSE or their brokerage accounts.

Anchor Investors Report

Usha Financial Services has successfully raised ₹27.90 crore from Anchor Investors, who were allocated 16,60,800 equity shares at a price of ₹168 per share. It's worth noting that the shares allotted to Anchor Investors are part of the Qualified Institutional Buyers (QIBs) reservation portion.

How to Check Allotment Status

The allotment date for the Usha Financial Services IPO is set for October 29, 2024. Investors can check their allotment status using the following steps:

Navigate to the IPO allotment status page on the registrar’s website.

Select Usha Financial Services Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to view your allotment status.

This process allows investors to efficiently verify their IPO allotment and make informed decisions regarding their investments.

Objectives of Usha Financial Services Limited IPO

The funds raised from the Fresh Issue will be allocated towards several objectives:

₹7,000.00 lakhs will be utilized to augment the company's capital base.

Funds will also be directed towards general corporate purposes.

Additionally, a portion of the proceeds will cover issue expenses.

Financial Performance

Usha Financial Services has exhibited notable financial growth over recent fiscal years. For the period ending September 30, 2024, and the fiscal years 2024, 2023, and 2022, the revenues from operations were recorded at ₹2,681.26 lakhs, ₹6,396.05 lakhs, ₹4,618.73 lakhs, and ₹2,531.36 lakhs, respectively. The EBITDA figures for the same periods were ₹1,773.94 lakhs, ₹4,776.85 lakhs, ₹3,552.20 lakhs, and ₹1,623.05 lakhs, indicating a healthy operational performance.

The Profit After Tax (PAT) for the recent quarter and preceding fiscal years were ₹504.16 lakhs, ₹1,344.95 lakhs, ₹1,016.55 lakhs, and ₹414.42 lakhs, respectively, showcasing the company’s ability to generate profits.

For the Usha Financial Services IPO, the company is issuing shares at a pre-issue EPS of ₹8.64 and a post-issue EPS of ₹6.18. The pre-issue P/E ratio is 19.44x, while the post-issue P/E ratio is 27.18x, compared to the industry P/E ratio of 45.47x. Furthermore, the Return on Capital Employed (ROCE) for FY24 stands at 15.40%, and the Return on Equity (RoE) is 14.30%, suggesting that the IPO is relatively well-priced within its sector.

Market Insights and Recommendations

While Usha Financial Services presents a compelling offering within the NBFC space, the current GMP of ₹0 and the competitive valuation metrics suggest potential challenges for new investors. Given the lack of expected listing gains and the fluctuating market dynamics, this IPO may not be suitable for risk-averse investors.

Therefore, the Usha Financial Services IPO is recommended with caution, particularly for those who are looking for immediate listing gains or long-term investments. Potential investors should consider the company’s financial health, industry position, and the broader economic landscape before making any investment decisions.

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