Usha Financial Services is making headlines as it launches its Initial Public Offering (IPO), aiming to raise ₹98.44 Crores through a book-built issue consisting entirely of a fresh issue of 58.60 lakh shares. The subscription period for this significant IPO began on October 24, 2024, and will close on October 28, 2024. This IPO is particularly noteworthy for investors seeking opportunities in the non-banking finance company (NBFC) sector, as Usha Financial Services is registered with the Reserve Bank of India as an NBFC-ICC (Investment & Credit).

Company Overview

With over nine years of lending experience, Usha Financial Services provides a diversified range of lending solutions tailored for fellow NBFCs, corporates, MSMEs, and individual entrepreneurs, with a special focus on women entrepreneurs. Their services also include Electric Vehicle (EV) financing, underscoring their commitment to supporting modern and sustainable financing solutions. The company's strategic approach positions it as a robust player in the financial services industry.

IPO Details

The share price band for the Usha Financial Services IPO is set between ₹160 to ₹168 per equity share. At the upper end of the price band, the market capitalization of Usha Financial Services Limited at the IPO price of ₹168 per share is expected to be ₹365.19 Crore. Investors will need to buy shares in lots of 800, meaning a minimum investment of ₹1,34,400 for retail investors. High-Net-Worth Individuals (HNIs) must invest a minimum of ₹2,68,800, which corresponds to two lots of shares.

The book-running lead managers for this IPO are UNISTONE CAPITAL PRIVATE LIMITED and NARNOLIA FINANCIAL SERVICES LIMITED, while SKYLINE FINANCIAL SERVICES PRIVATE LIMITED will act as the registrar. Additionally, SS Corporate Securities Limited will function as the market maker for the Usha Financial Services IPO, which is critical for ensuring liquidity in the stock post-listing.

Subscription Status

As of October 26, 2024, the Usha Financial Services IPO has garnered significant interest, subscribing 3.13 times on its second day. This robust subscription indicates strong demand from investors. For those monitoring the IPO, real-time updates can be accessed on the NSE website.

Anchor Investors

In a strategic move, Usha Financial Services raised ₹27.90 Crores from anchor investors at a price of ₹168 per share, allocating 16,60,800 equity shares to them. This early interest from institutional investors often serves as a positive signal regarding the company’s market potential.

Allotment Process

The allotment date for the Usha Financial Services IPO is set for October 29, 2024. Investors can check their allotment status on the registrar’s website by selecting Usha Financial Services Limited from the dropdown list and entering their application number, PAN, or DP Client ID.

Utilization of IPO Proceeds

The proceeds from the fresh issue will be strategically allocated to enhance the company's capital base, general corporate purposes, and cover issue expenses, demonstrating prudent financial planning and a commitment to growth.

1. Capital Augmentation: ₹7,000 Lakhs will significantly bolster the company's financial foundation.
2. General Corporate Purposes: The flexibility to address various operational needs and strategic initiatives.
3. Issue Expenses: Covering costs associated with the IPO process to ensure a smooth transition into the public markets.

Financial Performance

Reviewing Usha Financial Services' financials provides further insights into its investment potential. The company's revenue from operations for the fiscal year ended September 30, 2024, reached ₹2,681.26 lakhs, up from ₹2,531.36 lakhs in the previous year. Their EBITDA for the same period was ₹1,773.94 lakhs, reflecting strong operational efficiency.

The Profit After Tax (PAT) showed an increase, with figures at ₹504.16 lakhs for FY24, indicating healthy profit margins. For investors, the company presents a pre-issue EPS of ₹8.64, transitioning to a post-issue EPS of ₹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 P/E ratio of 45.47x. This data suggests that Usha Financial Services is fairly priced, making it a potentially attractive investment.

Risk Consideration

Despite the attractive metrics, the Grey Market Premium (GMP) for Usha Financial Services IPO indicates potential listing gains of 0%, suggesting cautious optimism among investors. Given these market dynamics, it is advisable for risk-averse investors to approach the Usha Financial Services IPO with caution, particularly for those seeking listing gains or long-term investment purposes.

Conclusion

In summary, Usha Financial Services is poised to make a significant impact with its IPO. Investors should consider the company’s robust lending background, strong financial performance, and strategic positioning within the NBFC sector. For further information on IPOs, consider exploring the Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and stay updated with the Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News- Finance Saathi.

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This comprehensive overview of the Usha Financial Services IPO provides valuable insights for potential investors and highlights critical details that can guide their investment decisions.