- Date : 17/08/2023
- Read: 3 mins
Find out all about the business and financial prospects of SBFC Finance, the new stock in the market with a solid listing day gain.
SBFC Finance Limited got listed on the stock exchange on 16th August 2023, at a premium of 44%. During the day, it surged to up to 66% of its share price. Such price movements often attract the attention of investors. Investors looking for listing day gains will book profit, while long-term investors will look for opportunities to add the stock to their portfolio. For the respective investment goals, the time is right. However, one must watch the share price movement carefully while doing so.
Key highlights:
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SBFC Finance had a 66% listing day peak in the stock market
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It is involved in lending to MSMEs and gold loans
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Experts are optimistic about their long-term financial and business prospect
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New investors must look at suitable entry points for adding SBFC to their portfolio
SBFC’s IPO debut
Despite the weakness in the equity market, SBFC Finance has had a strong debut in the market. This is a positive sign for the stock. Besides, the company is involved in a promising sector as well. As a lender to the MSME sector, SBFC acts as a non-deposit-taking non-banking finance company (NBFC).
The MSME sector will continue to receive encouragement, particularly with the government’s focus on Make in India and the Atmanirbhar Bharat Mission. The company’s business model is hinged on the highly probable MSME sector growth. Besides, its asset quality has been stable so far. SBFC Finance has garnered a strong revenue growth of 38.9%, thereby outscoring its 3-year CAGR of 18.3% handsomely. During the period FY19 and 23, SBFC has witnessed a 44% CAGR in assets under management and a 40% CAGR in loan disbursements.
Also Read: SBFC Finance IPO Tomorrow: 5 Facts To Know About The Offer
Expert speaks on SBFC Finance
Experts generally have a positive expectation from the long-term potential of the stock. Apart from the sectoral importance and the company’s sound financials, experts have noted that the importance of NBFCs, in general, is poised to increase.
SBFC has an in-house sales team and a diversified presence in various states. The management team is experienced, and the company’s corporate governance seems reassuring as well. It has a presence in 120 cities across 18 states/union territories, with 152 physical branches. It has a strong gold loan portfolio, which accounts for 17% of the business.
The company has attracted strong institutional private equity investments, with stakes owned by Clermont Group, Arpwood Group and Malabar Group.
Conclusion
Partial profit booking has been advised with the expectation of a longer rally. While the stock has breached Rs 90 in the first two days, long-term investors can seek an entry point at a mark around or below Rs 80. Do keep the share on your watchlist if you are looking for the entry point.
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