SBFC Finance makes a strong debut on BSE, NSE; shares list at 44% premium over IPO price

SBFC Finance shares made a strong debut in the secondary market on Wednesday, as trading resumed on Dalal Street after a mid-week holiday for Independence Day. The SBFC Finance stock began its journey in the listed space at Rs 81.99 apiece on BSE — a premium of Rs 24.99 or 43.8 per cent compared with the upper end of the IPO price range. On NSE, the stock opened at Rs 82 apiece, a premium of Rs 25 or 43.9 per cent.

The scrip settled at Rs 92.21 and Rs 92.65 apiece on BSE and NSE respectively.

Mumbai-based non-banking financial company (NBFC) SBFC Finance's IPO — comprising fresh issuance worth Rs 600 crore and an offer for sale (OFS) of Rs 425 crore — concluded last week with an overall subscription of 70 times the equity on offer.

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The initial share sale received bids for 936.8 crore shares as against the 13.4 crore shares on offer, driven by strong participation from institutional investors, according to provisional exchange data.

Here's how different types of investors responded to the issue:

What should investors do?

Trade Swift Broking Director Sandeep Jain, who had expected the stock to list at a premium of 50 per cent, suggests investors hold SBFC Finance shares.

"Many other stocks from the NBFC space are likely to come into action after the strong listing of SBFC Finance, whose management is impressive... NBFC results have been good," he told Zee Business.

EDITOR'S TAKE

Ahead of the IPO, Zee Business Managing Editor Anil Singhvi had suggested applying for the issue for "big listing gains", having identified the following key points about the company:

Positive

• The company has experienced promoters
• It has an MSME-focused business model
• It has an impressive financial track record
• Its anchor book is strong
• Its valuations are reasonable

Negative

• The company's net interest margin (NIM) is on a declining trend
• Its non-performing asset (NPA) levels are higher than the industry

Under the IPO — which was open for subscription from August 3 to August 7 — potential investors could bid for SBFC Finance shares in a price range of Rs 54-57 apiece in multiples of 260, translating to Rs 14,040-14,820 per lot.

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