- Date : 02/08/2023
- Read: 3 mins
Curious about SBFC Finance IPO? Unveil the secrets and make informed investment decisions. Read this article to discover the 10 essential things to know before buying shares!
Get ready for an exciting opportunity as SBFC Finance, the non-banking finance company (NBFC) backed by Clermont Group and Arpwood Group, gears up to launch its highly anticipated initial public offering (IPO). With a strong focus on the MSME segment, SBFC Finance is set to make waves in the market. As the first IPO of August 2023, this is a chance to be part of something groundbreaking. In this article, we'll take a look at 5key points to consider before you invest.
- Company: Focused on MSME sector
- IPO: Rs 600 crores fresh equity, Rs 425 crores OFS
- Price: Rs 54-57 per share
- Investors: 50% QIBs, 15% NII, 35% retail
SBFC Finance's IPO is a good opportunity to invest in a leading NBFC with a strong track record. The company's financial performance and focus on the MSME sector are promising, but investors should consider risks like market volatility and regulatory changes before investing.
Given below are factors that you should consider before investing:
1. Company Profile:
The company is a NBFC that provides loans to entrepreneurs, small business owners, and self-employed individuals. They offer secured MSME loans and loans against gold. It is one of the fastest-growing companies in India that helps small businesses grow.
2. Industry Overview:
Credit from NBFCs is predicted to grow at 12-14% from FY23-25. Retail sectors like housing, auto, and microfinance will be the main drivers. The economy's swift revival is anticipated to boost consumer demand in FY24, resulting in robust industry growth, as per Crisil's report.
3. Key Features of IPO:
This IPO is offering Rs 600 crore in fresh equity and Rs 425 crore in an offer for sale. The price band is Rs 54-57 per share. About 50% of the offer is reserved for QIBs, 15% for NII, and 35% for retail investors. The proceeds from the fresh issuance will be used to boost its capital base. The Grey market premium of the company is INR 40.
4. Financials of the Company:
SBFC Finance's financial performance in FY23 was strong, with profit growth of 132%, revenue growth of 38.5%, and net interest income growth of 49%. Asset quality improved with gross NPA decreasing by 0.31%, net NPA decreasing by 0.22%, and provision coverage ratio improving to 42.04%.
5. Key Risks:
SBFC's profitability may be subdued due to margin pressure and elevated operating costs. The company's LAP loan book has grown, but employee attrition is high and operating leverage may play out slowly.
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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas