SBFC Finance makes stellar stock market debut after strong IPO subscription

SBFC Finance made a stellar stock market debut on Wednesday, August 16. SBFC Finance shares opened for trading at Rs 82 against its initial public offering (IPO) price of Rs 57, marking an upside of 44 per cent from the IPO price on the National Stock Exchange (NSE). On the BSE, SBFC Finance shares opened for trading at Rs 81.99, up 44 per cent from the IPO price.

SBFC Finance extended the rally after making strong market debut and rose as much as 66 per cent from the IPO price to hit an intraday high of Rs 94.60.

"SBFC Finance made another intriguing listing where investors would receive some decent returns in the IPO. 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," said Anubhuti Mishra, equity research analyst at Swastika Investmart.

SBFC Finance IPO

SBFC Finance sold shares in price band Rs 54-57 per share in the IPO which ended on August 7. SBFC Finance shares were in very high demand during the three-day IPO as it was subscribed 74.06 times. Qualified institutional buyers, which include large investors like mutual funds, banks and FIIs, participated in the IPO in large numbers as the portion set aside for them was booked 203.61 times. Shares set aside for non-institutional investors (NII) was subscribed 51.82 times and shares set aside for retail investors was booked 11.60 times.

Retail investors were allowed to bid for minimum one lot of 260 shares up to maximum of 13 lots. At the upper end of the price band, one lot SBFC Finance shares was priced at Rs 14,820.

SBFC Finance financials

SBFC Finance posted a net profit of Rs 149.74 crore for the financial year ending March 31, 2023. The company had a total revenue from operations of Rs 740.03 crore, compared to Rs 530.70 in the year-ago period. The company had a net profit of Rs 64.52 crore in FY22. The AUM (Assets Under Management) in the period rose to Rs 4,942.82 crore against Rs 3,192.18 crore.

SBFC Finance is a non-deposit-taking non-banking finance company. The primary customer base of the company includes entrepreneurs, small business owners, self-employed individuals, and salaried and working-class individuals.

As of 11:42 am, SBFC Finance shares traded 13.9 per cent higher from opening price at Rs 93.40.