Suryoday SFB shares tumble on listing; begin trading at 3.93% discount to IPO price

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Updated: Mar 26, 2021 9:53 AM

Suryoday Small Finance Bank shares listed today at a discount to the IPO price.

Suryoday Small Finance bankShares of Suryoday Small finance Bank made their listing debut on the bourses today. (Image: REUTERS)

Suryoday Small Finance Bank shares listed today at a discount to the IPO price. Stocks of Suryoday SFB began trading at Rs 293 per share, down 3.93% or Rs 12 from the issue price of Rs 303-305 apiece. The debutant stock had a market capitalization of Rs 3,109 crore on listing. Suryoday Small Finance Bank entered Dalal Street earlier last week to raise Rs 582 crore through the listing of its shares on the bourses which was an amalgamation of a fresh issue and an offer for sale. Overall, 19,093,070 equity shares of Suryoday SFB were offered in the IPO.

Check Live Price: Suryoday Small Finance Bank

Having a customer base was 1.44 million and an employee base of 4,770 employees, Suryoday SFB is a leading institution in the country operating 554 banking outlets. Post issue, the promoter shareholding in Suryoday SFB will come down to 28% from 30.3% earlier. Meanwhile, the public shareholding will increase to 72% from 69.7% pre-issue. 

Suryoday SFB has seen its net interest margin inch up from 10.4% at the end of FY18 to 11.92% in FY20. Net profit of the firm has moved higher from Rs 11.49 crore to Rs 111 crore between FY18 and FY20. Gross non-performing assets of the SFB dropped from 3.54% in the fiscal year 2018 to 1.81% in the financial year 2019. However, in FY20 the same jumped to 2.79%. However, the provision coverage ratio is strong at 84.71%. 

Suryoday Small Finance Bank will join the likes of AU Small Finance Bank, Equitas Small Finance Bank, and Ujjivan Small Finance Bank on the bourses. These three listed players of the SFB industry account for 63%  of the industry AUM, according to HDFC Retail Research. Meanwhile Suryoday Small Finance Bank accounted for merely 4% of the industry AUM, at the end of the previous financial year.

On the valuation front, Suryopday SFB might list at a discount to peers. “Considering the adjusted book value of Rs 135.64 per share on a post-issue basis, the company is going to list at a P/B of 2.25 times while its peers such as AU Small Finance Bank is trading at 8.44 times P/B,” said analysts at Marwadi Financial Services. 

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