Ujjivan Small Finance Bank Ltd, a unit of lender Ujjivan Financial Services Ltd, made a strong stock-exchange debut on Thursday with its shares listing at a premium of almost 57% to the initial public offering price.
Shares of Ujjivan SFB, which received interest from homegrown private equity firm CX Partners and Singapore sovereign wealth fund GIC Pte Ltd ahead of its IPO, began trading at Rs 58 apiece on the BSE compared with the IPO price of Rs 37 apiece. The stock touched a high of Rs 62.80 apiece in initial trade. It later ended the day at Rs 55.90 apiece, clocking 51% gains on its first day.
Ujjivan SFB now commands a market valuation of Rs 9,661 crore ($1.37 billion) against the Rs 6,394.42 crore valuation it had sought in the IPO.
The strong showing comes after the bank’s share sale was covered170 times, making it the third most oversubscribed IPO in India, thanks to high demand from all categories of investors.
The Rs 750-crore offering was entirely a fresh sale of shares. Ahead of the IPO, the lender raised Rs 303.75 crore from anchor investors including Singapore sovereign wealth fund GIC Pte Ltd and homegrown private equity firm CX Partners.
Other marquee institutional investors included Scottish firm Aberdeen, Goldman Sachs and IIFL Special Opportunities Fund, which had previously subscribed to Ujjivan SFB’s shares in a pre-IPO round a fortnight ago. The lender had then raised Rs 250 crore by diluting a 4.75% stake.
The bank will use the net proceeds from the IPO to augment its tier-1 capital for future requirements to grow its operations and comply with regulatory norms for enhanced capital base as may be prescribed in the future.
Ujjivan SFB will join listed peers such as PE-backed AU Small Finance Bank Ltd, Equitas Holdings as well as its parent Ujjivan Financial on stock exchanges. Chennai-based Equitas listed its shares in April 2016, followed closely by Ujjivan Financial.
Bengaluru-based Ujjivan Financial launched small finance banking operations in February 2017 after transferring the business to Ujjivan SFB, a new entity. The group had received in-principle approval from the Reserve Bank of India in October 2015 to establish a small finance bank.