Shares of micro-finance player Spandana Sphoorty are set to debut on the exchanges on Monday, 19th August 2019.
Shares of micro-finance player Spandana Sphoorty are set to debut on the exchanges on Monday, 19th August 2019. Earlier, Spandana Sphoorty IPO was fully subscribed on the third day of the offer on August 7th 2019. The company received bids for 80,74,507 shares against the issue size of 1,01,07,486 shares, which was 1.02 times of the total issue size. Spandana Sphoorty IPO consisted of a fresh issue as well as an offer for sale, totalling to Rs 1,200 crore. The issue comprised an OFS of up to 93 lakh shares, including dilution by early stage investors and by Padmaja Ganjireddy, from the promoter group totalling to Rs 800 crore. The company had raised Rs 400 crore from the fresh issue of shares.
The Hyderabad-based firm Spandana Sphooty had set a price band of Rs 853-Rs 856 per share for its public offer. The IPO opened on August 5th, and closed for subscription on August 7th. The minimum bid lot had been set at 17 equity shares and multiples of 17 thereof. According to brokerages, given the ongoing slowdown in the economy and the stress in the NBFC space, listing gains are unlikely. At the upper end of the price band, the issue comes at a price-to-adjusted book value (P/ABV) of 2.4 times. “The prevailing sentiments are very much negative for NBFCs and micro-financiers post the IL&FS crisis, making risk-return unfavourable for short-term investors or individuals looking for listing gain,” Choice Broking said in a report, assigning a‘Subscribe with caution’ rating to the issue.
“We believe strong AUM growth of 35 per cent and increasing leverage will keep ROA /ROEs at 6.5 per cent/24 per cent in the medium term. We believe the risk-reward ratio is encouraging and recommend ‘Subscribe’ to the issue with a long-term perspective,” SPA Securities said in its IPO note.
(Please consult your financial advisor before taking any investment-related decision)