Before the offer, the Capital Small Finance Bank raised ₹57 crore from anchor investors. Whiteoak Capital, Nippon Life India, Edelweiss Tokio Life Insurance, Ashoka India Equity Investment Trust, 360 ONE Mutual Fund, HDFC Life Insurance Company, Ananta Capital Ventures Fund, ICICI Prudential Life Insurance Company, SBI General Insurance Company, Kotak Mahindra Life Insurance Company participated in the anchor book of the company.
Capital Small Finance Bank GMP Today
The company’s shares in the gray market continued to trade at a premium of ₹43. This indicates an estimated list price of ₹511, up 9.19 percent from the IPO price of ₹465. The GMP was the same as in the previous session (February 6). However, it declined from ₹47 February 5 and ₹50 on February 4th.
However, it should be noted that the gray market premium is only an indicator of how the company’s shares perform in the unlisted market and can change quickly.
Capital Small Finance Bank IPO: Should you buy?
Anand Rathi: Subscribe for the long term.
Capital Small Finance Bank is a Retail focused liability franchise with a high share of CASA. It has a Secured and diversified advanced portfolio. Their credit rating processes and risk management practices enable them to maintain good asset quality and low delinquencies. They have gained an understanding of their market and customer base over the years, enabling them to meet the financial requirements of their existing and potential customers.
Read here: Rashi Peripherals IPO: GMP, issue details, 10 key things to know
At the upper price band company is valued at a P/B of 2.01x, with a market cap of ₹21,080 million after issuance of equity shares and a return on net worth of 15.33 percent. The brokerage believes the company’s valuation is fairly priced and recommends a “Subscribe-Long Term” rating to the IPO.
SMC Global: Subscribe
Capital Small Finance Bank stands out as the pioneer non-NBFC microfinance entity to obtain the coveted SFB license in 2015. Currently rooted in the North, this ambitious player is eyeing nationwide expansion through an extensive branch network in the coming years. The bank believes it is well positioned to take advantage of the tailwinds and intends to continue growing its portfolio with a focus on safe lending, which it believes will give it a competitive edge over its competitors. Boasting consistent top and bottom line growth, the issue seems attractively priced. Savvy investors looking for long-term gains could consider this a promising opportunity.
Sushil Finance: Subscribe for long term
The company has a strong presence in semi-urban and rural areas with a branch-based operational model. The company intends to continue to grow the loan book organically with a focus on secured lending. They also intend to leverage technology and data analytics for scalability and profitable growth. The small finance business in India is becoming a very competitive area. The company has generated negative cash flows in the past. However, with strong penetration of banking and microfinance services expected in the rural and semi-urban areas, the company is gaining. The Total revenue grew at a CAGR of 14.1% over FY21– FY23. The net profit margin in FY23 stood at 13.85% and as per HYFY24 – 14.1%. The gross NPA and net NPA stood at 2.77% and 1.36% respectively in FY23. The company generated ROE and ROA of 16.62% and 1.22% in FY23 and the number was 16.45% and 1.28% in HYFY24. Keeping all these factors in mind cash rich investors can apply for the IPO with Long term visibility.
Marwadi Financial Services: Subscribe
Considering the Sep- 23 BVPS of ₹257.92 post-issue, the company will list at a P/B of 1.81x with a market cap of Rs. 21,080 mn while its peers namely IDFC First Bank, AU SFB, Equitas SFB, Suryoday SFB, Ujjivan SFB are trading at P/B of 2.11x, 3.82x, 2.25x, 1.09x, 2.72x. We assign a “Subscribe” rating to this IPO as the company has a consistent track record of growth with consistently improving operational and profitability metrics. Also, it is available at a reasonable valuation compared to its peers.
Dilip Davda: May Subscribe
This small finance bank is currently a north region-centric financial service provider and is considering a Pan India presence in coming years with the expansion of its branch network. For the reported periods, it posted steady growth in the top and bottom lines. Based on FY24 annual revenues, it looks like an aggressively priced affair. Well-informed investors can park funds for the long-term rewards, opines Dilip Davda, Contributing Editor at Chittorgarh.com.
Capital Small Finance Bank IPO Details
The issue is a combination of fresh issue of 96 lakh shares joined to ₹450.00 crore and offer for sale of 16 crore shares aggregating to ₹73.07 crores. The minimum lot size per application is 32 shares and in multiples. The minimum amount of investment required from retail investors is ₹14,976.
The bank proposes to utilize the net proceeds of the fresh issue to augment the Tier-I capital base to meet future capital requirements. Further, the proceeds of the fresh issue will also be used to meet the expenses related to the offer.
Nuvama Wealth Management Limited, Dam Capital Advisors Ltd (Formerly IDFC Securities Ltd), and Equirus Capital Private Limited are the book-running lead managers of the Capital SFB IPO, while Link Intime India Private Ltd is the registrar for the issue.
The allotment for the Capital SFB IPO is expected to be completed on Monday February 12, 2024. Capital SFB IPO will list on BSE, NSE with the tentative listing set as Wednesday, February 14, 2024.
About Capital Small Finance Bank
In 2015, Capital SFB became the first non-NBFC microfinance entity to receive the SFB license. The company has a strong presence in semi-urban and rural areas with a branch-based operating model. Capital Small Finance Bank is headquartered in Jalandhar, Punjab, and has strategically expanded its SFB operations in northern states of India such as Punjab, Haryana, Rajasthan, Delhi, Himachal Pradesh and UT Chandigarh. As of June 30, 2023, Capital Small Finance Bank had a presence in five states and one union territory, with a total of 172 branches and 174 ATMs.
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decision.
Here’s your comprehensive 3-minute summary of everything Finance Minister Nirmala Sitharaman said in her budget speech: Click to download!
Catch all Business News, Market News, News Events and Latest News Updates on Live Mint. Check out all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More or less
Published: 07 Feb 2024, 09:10 IST