Utkarsh Small Finance Bank, which will make its grand debut on the BSE and NSE on July 24; Should you buy?
Utkarsh Small Finance Bank IPO: The initial public offering (IPO) of Utkarsh Small Finance Bank was subscribed 16.2 times on second day, led by strong bidding from retail and non-institutional investors. The IPO will close on July 14.
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After the IPO, Utkarsh will join the league of other small finance banks to be listed on the stock exchanges such as AU Small Finance Bank, Equitas Small Finance Bank, Ujjivan Small Finance Bank and Suryoday Small Finance Bank.
Utkarsh Small Finance Bank IPO: Subscription Status
As per NSE data, the IPO received bids for 1,95,26,93,400 shares against 12,05,43,477 shares on offer.
The IPO was subscribed 36.66 times by retail individual investors (RIIs), 27.72 times by non-institutional investors (NIIs) and 3.88 times by qualified institutional buyers (QIBs).
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Utkarsh Small Finance Bank IPO Dates
The public issue will open on July 12 and bidding will close on July 14. The anchor book, the part of qualified institutional buyers, was opened on July 11.
Utkarsh Small Finance Bank IPO Price Band
The small finance bank has set the price band for its issue at Rs 23-25 per share.
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Utkarsh Small Finance Bank IPO Issue Size
The bank plans to raise Rs 500 crore from its offering that comprises only fresh issue portion.
Utkarsh Small Finance Bank IPO Objectives of Issue
Utkarsh Small Finance Bank will utilise net issue proceeds for augmenting its Tier – 1 capital base to meet its future capital requirements, besides issue expenses.
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Utkarsh Small Finance Bank IPO Lot Size
Investors can bid for a minimum of 600 equity shares and in multiples of 600 shares thereafter. Hence, the minimum investment by retail investors in the public issue would be Rs 15,000 for one lot and the maximum investment would be Rs 1.95 lakh for 13 lots.
Utkarsh Small Finance Bank IPO About Bank
Utkarsh Small Finance Bank recorded the third fastest gross loan portfolio growth between FY19 and FY23 among SFBs at above Rs 6,000 crore, as per CRISIL report.
In October 2015, Utkarsh CoreInvest received the RBI in-principle approval to set up a small finance bank and after the same later incorporated Utkarsh Small Finance Bank as a wholly owned subsidiary in April 2016. After the obtaining RBI licence in November 2016, Utkarsh CoreInvest transferred its microfinance business to Utkarsh Small Finance Bank.
The small finance bank commenced its operations in January 2017, with operations across 26 states and Union territories through 830 banking outlets and 15,424 employees, as of March 2023.
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Utkarsh Small Finance Bank IPO Listing and Allotment Dates
The finalisation of basis of allotment of IPO shares is going to take place by July 19 and the successful investors will get shares in their demat accounts by July 21. The refunds will be credited to bank accounts of unsuccessful investors by July 20.
Utkarsh Small Finance Bank, which will make its grand debut on the BSE and NSE on July 24 as per the IPO schedule in draft prospectus.
ICICI Securities and Kotak Mahindra Capital Company are the book running lead managers to the issue, while KFin Technologies is the registrar to the offer.
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Utkarsh Small Finance Bank IPO GMP
The Utkarsh Small Finance Bank IPO GMP aka Grey Market Premium is Rs 17.
Utkarsh Small Finance Bank IPO Should you Invest?
Motilal Oswal stated that Utkarsh SFB, one of the top SFBs, has strong financials, good asset quality, and healthy return ratios in its report. It appears that the issue is reasonably priced at 1.1x FY23 ABV (on a fully diluted basis). The public offer might spark some interest given the present strong market and significant demand for SFB stocks. The brokerage advises clients to subscribe for IPO listing gains as a result.
Reliance Securities claims that Utkarsh SFB is constantly working to enhance its operations through deeper understanding of consumer trends and the creation of tailored solutions for specific customer segments. With the aid of technology, processes, and data analytics, it aims to accelerate expansion by diversifying its product offerings, target markets, and geographic reach.
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Earnings growth is still robust because NIMS have improved and NPA have been on a downward trend over the past three years. The brokerage advises subscribers to subscribe to this issue for the long term because, based on FY23 financials, the IPO is valued at 6.8x P/E and 1.1 times P/BV, It added.
