Microlender CreditAccess Grameen falls on stock market debut
Photo Credit: Reuters

CreditAccess Grameen Ltd, which operates under the Grameen Koota brand, made a weak debut on the stock exchanges on Thursday with its shares falling as much as 9% before recovering some losses.

Shares of the Bengaluru-based microlender began trading on the BSE at Rs 385 apiece compared with the initial public offering (IPO) price of Rs 422, stock-exchange data showed. The stock recovered to Rs 414.05 in opening trade.

The benchmark BSE Sensex touched another new high in morning trade with marginal gains.

CreditAccess is the 19th company to list on the main board of the stock exchanges in 2018. Twelve of the previous 18 companies had gained on debut this year.

The weak start to CreditAccess follows an IPO that managed to sail through on the final day of the issue with the help of institutional investors. However, retail investors and high net-worth individuals remained on the sidelines.

The company now commands a market capitalisation of Rs 5,900.54 crore ($843 million) against the Rs 6,050 crore ($885 million) it had aimed for in the IPO.

CreditAccess Grameen, which is majority-owned by Netherlands-based CreditAccess Asia NV, had filed its draft prospectus for the IPO in January. It received regulatory approval for the IPO on 12 June. CreditAccess Asia counts private equity firm Olympus Capital Holdings Asia among its key investors.

ICICI Securities, Credit Suisse Securities (India), IIFL Holdings and Kotak Mahindra Capital Co managed the IPO.

CreditAccess Grameen is the second-largest microfinance institution in India, after Bharat Financial Inclusion Ltd. It joins other microfinance institutions-turned-small finance banks such as Ujjivan Financial Services Ltd, Equitas Holdings Ltd and AU Small Finance Bank Ltd in going public. The trio attracted a massive response from investors during their IPOs.

In May 2016, the IPO of Bengaluru-based microfinance firm Ujjivan Financial received bids for 40.66 times while the IPO of Equitas was covered more than 16 times. Private equity-backed AU Small Finance Bank’s IPO was subscribed more than 50 times.

CreditAccess Asia had first backed the Indian microlender in 2008. It also invested in Equitas Microfinance around the same time but partially exited after Equitas converted into a small finance bank.

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