AU Small Finance Bank on Monday made a strong debut on the bourses. The stock got listed at Rs 530 – 48% above its issue price of Rs 358 – and ended the session at Rs 531.50, 48.46% above the issue price. The initial public offering (IPO) of AU Small Finance Bank was subscribed by 53.44 times with investors bidding for 201.45 crore shares of the 3.76 crore shares on offer.
The company priced its IPO, aimed at raising Rs 1,912 crore, between Rs 355 and Rs 358. The qualified institutional buyers bid for 82.59 crore of the 1.04 crore shares reserved for them. High net-worth individuals bid for 112.84 crore shares of the 78.63 lakh shares reserved for them, bidding 143.51 times. Retail investors bid for nearly 3.2 times, or 5.87 crore shares of the 1.83 crore shares reserved. Employees bid for 13.81 lakh shares of the10 lakh shares reserved for them.
AU Small Finance Bank had allotted shares worth Rs 563 crore to 34 anchor investors. The issue was an offer for sale of 5.3 crore shares by promoters, MYS Holdings, Redwood Investment, International Finance Corporation, Labh Investments, Ourea Holdings and Kedaara Capital.
The company posted a restated profit of Rs 842 crore for the year ended March 31, 2017. Of this, about Rs 517 crore came from the sale of the stake in Au Housing Finance and other subsidiaries. For the year ended March 31, 2016, the company posed a net profit of Rs 247.1 crore. The offer was made through book building process, wherein not more than 50% of the shares are reserved for qualified institutional buyers (QIB) category, 15% for high net-worth individuals (HNIs) and 35% for retail investors.
Up to 60% of the QIB portion has been reserved for anchor investors and one-third of the anchor investor portion has been reserved for domestic mutual funds. Five per cent of the QIB category, excluding the anchor investor portion, has been reserved for mutual funds on a proportionate basis.
ICICI Securities, HDFC Bank Investment Banking Group, Motilal Oswal Investment Advisors, and Citigroup Global Markets were the book running lead managers for the issue. The company received the small finance bank (SFB) licence from the Reserve Bank of India on December 20, 2016. It commenced its SFB operations with effect from April 19, 2017. Prior to this, the Company was a retail focused non-banking finance company.