CreditAccess Grameen IPO: The initial public offering (IPO) of Bengaluru based microfinance institution (MFI) CreditAccess Grameen opens for subscription on August 8, Wednesday. Credit Access Grameen Limited, which was formerly known as Grameen Koota Financial Services, is focussed on providing micro-loans to women customers predominantly in rural areas in India. The company is India’s third largest NBFC-MFI in terms of gross loan portfolio as of March 31, 2017, according to Crisil Research.
Through the issue, CreditAccess Grameen intends to raise Rs 1,131.18 crore at a price band of Rs 418-422 per share. The promoter holding in CreditAccess Grameen will come down to 80% after the IPO, Udaya Kumar Hebbar, Managing Director and CEO of the company, told CNBC TV18 in an interview. Hebbar said that the primary issue is Rs 630 crore which is going to the company and Rs 501 crore is promoter diluting which is about 9% of the current holding. According to Hebbar, the capital adequacy ratio will rise to 38% with the capital raising. “So the total IPO size is Rs 1,130 crore,” he said.
Issue opens: August 8, Wednesday
Issue closes: August 10, Friday
Price Band: Rs 418-422/share
Bid lot: 35, and in multiples thereof
Face value: Rs 10 per share
Listing: BSE, NSE
Offer for sale: 11,876,485 equity shares
Fresh issue: Rs 630 crore
Leading Managers: ICICI Securities Ltd, Credit Suisse Securities Ltd, IIFL Holdings Ltd, Kotak Mahindra Capital Co Ltd
Registrar: Karvy Computershare Private Ltd
Hem Securities has rated a “buy” on the IPO issue. “The company is bringing the issue at p/b multiple of 2.94 on post issue book value at higher end of price band of Rs 418-422/share. Although co has shown strong growth with CAGR of more than 50% from FY14 to FY18 in its financials added by solid fundamentals as some of the co’s ratios are one of the best in industry but low ROE which will dilute post listing is a concern. Hence, we rated issue a ‘Subscribe’ one with limited upside potential,” Hem Securities said in a report.