The IPO for ESAF Small Finance Bank begins today: Will you be purchasing the Rs 463 crore issue?

 The IPO for ESAF Small Finance Bank begins today: Will you be purchasing the Rs 463 crore issue?

The IPO of the ESAF Small Finance Bank has received a "Subscribe" rating from a number of experts.

On November 3, subscriptions for ESAF Small Finance Bank's Rs 463 crore first public offering (IPO) commenced. The offering has a closing price range of Rs 57–60 per share. It closes on November 7. The issue has received a "Subscribe" rating from a number of analysts because to its exceptional return ratios and increasing retail deposits.

A new issuance of 6.51 crore shares valued at Rs 390.7 crore and an offer to sell 1.2 crore shares valued at Rs 72.3 crore make up the public offer. Kadambelil Paul Thomas as well as ESAF Financial Holdings Private Limited are the bank's proprietors.

Financially speaking, ESAF Small Finance Bank's net profit increased by 452 percent to Rs 302.33 crore in the fiscal year that concluded in March 2023 from Rs 54.73 crore in the same time the previous year. With deposits climbing 14.4% to Rs 14,665.6 crore and disbursements jumping 23% to Rs 14,690.6 crore over the previous year, net interest income climbed by 60% year over year to Rs 1,836.3 crore. With regards to asset quality, at the end of the June FY24 quarter, net non-performing assets (NPA) had decreased 297 bps YoY to 0.81 percent, while gross non-performing assets had decreased 451 bps on-year to 1.65 percent.

Should you purchase an IPO subscription for ESAF Small Finance Bank?

Investmart Swastika: Subscribe

At a P/BV of 1.5x, the issue seems to be well priced. Accordingly, Head of Wealth at Swastika Investmart Ltd. Shivani Nyati said, "We give an unconditional subscriber rating to ESAF Small Finance Bank IPO, reflecting the valuation overall better performance in terms of its CIR, NNPA, and NIM."

LKP Research: Enroll in

"Considering the exceptional return ratios—FY23 ROA/ROE of 1.6%/19.4%—we think it's worthwhile to subscribe to ESAF Small Finance Bank Limited. Therefore, we advise you to "Subscribe," according to LKP Research experts.

Hem Securities: Extended Subscription

The organization has been able to expand its operations outside of Kerala because to its grasp of the microloan market. "The company's client-centric products and procedures, as well as other non-financial services for Micro Loan Customers, are what fuel its expanding retail deposits portfolio and customer relationships, with a primary concentration on rural and semi-urban banking franchises. On the topic, we advise "Long Term Subscribe," according to Hem Securities experts.

Get Stoxbox: Sign Up

The lender will improve its capital adequacy and achieve a stable leverage position by using the net proceeds of the new equity share offering to supplement its Tier-I capital base. Analysts at Stoxbox said, "We consider the company is attractively positioned at the current P/BV multiple of 1.6x as well as advise investors to "Subscribe" from a medium to long-term perspective."