On Friday, ESAF Small Finance Bank shares went public at a premium of almost 20% above the issue price of Rs 60. On the BSE, the shares debuted at Rs 71.90, up 19.83 percent from the issue price. Later on, it surged 24.5% to Rs 74.70.
The company’s shares opened trading on the NSE at Rs 71, up 18.33%. In the morning trading, the firm was valued at a market value of Rs 3,685.82 crore.
The head of wealth at Swastika Investmart, Shivani Nyati, stated: “The ESAF Small Finance Bank made its debut at Rs 71.90, which is 20% more than its issue price. It is a significant player in the microloan market, mostly serving rural communities. The business is well-established in southern India. Its portfolio of retail deposits is also expanding. Examining its finances reveals that the business has seen significant growth in both its top and bottom lines.
According to her, the issue is being offered at a P/BV of 1.5x, which looks reasonable. Therefore, “allottees who applied for the public offering for listing premium are advised to maintain their stop loss at 60 and wait for further upside, whereas those who have a medium- to long-term perspective can also hold the stock,” in light of this valuation and its better performance in terms of its CIR, NNPA, and NIM.
Tuesday was the final day of subscriptions for the ESAF Small Finance Bank’s first public offering (IPO), with 73.15 subscriptions made. The price range for each share in the Rs 463-crore inaugural share sale was Rs 57–60.
In terms of clientele, yield on advances, net interest margin, assets under management, CAGR (compound annual growth rate), CAGR for total deposits, concentration of the loan portfolio in rural and semi-urban areas, and the ratio of microloan advances to gross advances, ESAF Small Finance Bank ranks among the top small finance banks in India.