Microfinance institution and small finance bank (SFB) licencee, Ujjivan Financial Services made a fairly strong debut on the bourses on Tuesday listing at Rs 231 apiece, a premium of 10.4% over the issue price of Rs 210. The stock ended the session at Rs 232.40 touching a high and low of Rs 244.65 and Rs 216.65, respectively. Ujjivan has a market capitalisation of Rs 2,738.47 crore post listing.
The initial public offering (IPO) in the price band of Rs 207- Rs 210 was oversubscribed 40.7 times with bids coming in for 120.5 crore shares of the total 2.96 crore shares on offer. The company’s IPO was made to enable the company to comply with the Reserve Bank of India’s directive which requires SFBs to keep the foreign shareholding below 49%.
The microfinance institution raised Rs 885 crore through the public offer. It reported a net profit of Rs 122 crore in the nine months ending December, 2015. Total revenues were Rs 729 crore while total expenses stood at Rs 541 crore. Ujjivan plans to convert itself into an SFB some time in the first quarter of 2017.
The Bengaluru-based company’s business is primarily based on the joint liability group-lending model for providing collateral free, small ticket size loans to economically active women, individual and micro and small enterprises.
In FY17 so far, six companies including Thyrocare Technologies, Infibeam Incorporation and Equitas Holdings have raised close to Rs 6,274 crore. In the previous financial year, nearly 42 companies took the IPO route to raise Rs 34,322 crore, according to Prime database.
Equitas Holdings, another SFB licencee, hit the primary market earlier in April. The stock had also witnessed a stunning debut gaining 33% on listing day. Equitas is currently trading 29% higher than its issue price of Rs 110.