The IPO of ESAF Small Finance Bank is successfully completed and is scheduled to go public on November 16th. From Investing.com

The initial public offering (IPO) of ESAF Small Finance Bank, which took place from November 3rd to 7th, was successfully completed with a strong response from investors. The IPO was oversubscribed 1.74 times and participation from all investor categories was observed. High-net-worth individuals bought 2.44 times their share, while private investors offered almost double their share. Qualified institutional buyers subscribed for 90% of their stake.

The Kerala-based bank sought to raise Rs 463 crore ($6.2 million) through the public issue, which included a fresh issue of shares worth Rs 390.70 crore and an offer for sale (OFS) of shares worth 72, 30 Crore by promoters and investors. The IPO was managed by ICICI Securities, DAM Capital Advisors and Nuvama Wealth Management, with Link Intime India Private Ltd acting as registrar.

On the first day of the IPO, the bank raised Rs 135 crore from anchor investors such as Ananta Capital Ventures Fund and ICICI Prudential Life Insurance. The price band for the IPO has been set at Rs 57-60 per share.

The IPO also included a fresh issue of 6,51,16,667 equity shares (₹390.70 crore) and an OFS of 1,20,50,000 equity shares (₹72.30 crore) at a price of ₹57-60 per share. Anchor investors absorbed 29.19% of the IPO size involving QIB shares. Offered with a lock-up period of one month for half of the shares and three months for the remainder.

ESAF Small Finance Bank plans to use the capital raised to improve its capital position and expand its investment portfolio. Prior to the listing, the bank’s shares were trading at a premium of around 35 percent on the gray market, indicating a potential listing gain of 33.33 percent.

The bank’s shares are expected to be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) on November 16. Post allotment completion on November 10, refunds will be processed by November 13, demat credits will be available until November 15 The success of the IPO reflects the bank’s strong performance indicators including sizeable assets under management, high compound annual growth rate (CAGR) and a robust microcredit advances to gross advances ratio.

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Based on the latest InvestingPro data, ESAF Small Finance Bank has presented promising financial metrics consistent with its successful IPO. The bank has a market capitalization of $186.06 million and a P/E ratio of 13.41, which suggests that its shares are trading at a relatively low price compared to its earnings. This is also confirmed by the bank’s adjusted P/E ratio for the second quarter of 2023, which is 13.1. In terms of revenue, the bank generated $95.71 million in the second quarter of 2023.

InvestingPro Tips shows that the bank is experiencing steady growth in earnings per share, which can be a positive sign for potential investors. Additionally, the bank trades at a low P/E relative to near-term earnings growth, suggesting it may be undervalued. Furthermore, the bank has been identified as a leading player in the banking industry, further supporting its strong market position.

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For more comprehensive insights and tips, consider exploring InvestingPro’s platform, which offers a wealth of data and advice for informed investing. There are currently 12 additional InvestingPro tips related to ESAF Small Finance Bank that could provide further valuable insights to potential investors.

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