SBFC Finance Shares List At 44% Premium Over IPO Price; Should You Buy, Sell or Hold?

SBFC Finance IPO Listing: SBFC Finance Ltd made a robust premium of 43.8 per cent on the exchanges in Wednesday’s trade. The stock debuted at Rs 82 on NSE over the IPO price of Rs 57 apiece. Meanwhile, on BSE it listed at Rs 81.99 per share.

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.

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.

The public issue subscribed 11.60 times in the retail category, 203.61 times in Quilified Institutional Buyers’ (QIB) category, and 51.82 times in the Non-Institutional Investors’ (NII) category.

The Rs 1,025 crore-worth SBFC Finance IPO comprised a fresh issuance of equity shares worth Rs 600 crore and an offer for sale (OFS) of Rs 425 crore.

The company had earlier raised Rs 304.4 crore from anchor investors ahead of the IPO opening.

SBFC Finance intends to use the net proceeds from the issue to meet future capital requirements that are anticipated to result from the expansion of their company’s operations and assets.

SBFC Finance IPO price band was set at Rs 54 to Rs 57 per equity share and the lot size was a minimum of 260 equity shares and in multiples of 260 equity shares thereafter.

What Should Investors Do?

Anubhuti Mishra, Equity Research Analyst at Swastika Investmart Ltd., said: “SBFC Finance Limited debuted in the secondary market at a listing price of Rs. 82 versus its issue price of Rs. 57, making it another intriguing listing where investors would receive some decent returns in the IPO. That represents a premium of almost 43 per cent, although it falls short of earlier projections, which is probably a result of broader market volatility. SBFC stands out as a rapidly expanding non-banking financial company (NBFC) with robust earnings growth and stable asset quality. However, it bears the vulnerability of being sensitive to interest rates and market cycles, so in this market, after listing at such a premium, one should book profit, however, aggressive investors may hold it for the long term.”