Investors experienced a significant listing gain of 60% from Utkarsh SFB’s IPO, and the shares of Utkarsh SFB closed with an approximate 6% gain last.
Read More: Utkarsh Small Finance Bank makes a strong debut on Dalal Street; what should investors do?
Utkarsh Small Finance Bank (SFB) has made an impressive debut in the stock market, witnessing remarkable growth within a week of its listing. Shareholders have seen their investments double in just two business days, reflecting the bank’s strong performance. During its listing on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), the bank’s shares were priced at Rs 39.95 and Rs 40, respectively, presenting a premium of 60% over the IPO price of Rs 25. This premium, along with strong investor confidence, drove the stock’s value to surge by 17% during intraday trading on the BSE, reaching Rs 56.30. Although the stock closed at Rs 51.19 by the end of the day, it still achieved a notable gain of 6.78%.
The Utkarsh SFB IPO received an overwhelming response from investors, underscoring the immense interest in the bank’s growth prospects. The IPO, with an initial offering of Rs 500 crore, was open for subscription from the 12th to the 14th July.
The overall subscription rate reached an astounding 110.77 times, illustrating the strong demand from investors. Qualified Institutional Investors (QIB) oversubscribed by 135.71 times, Non-Institutional Investors (NII) by 88.74 times, and the reserved shares for retail investors by 78.38 times. In addition to that, employees’ participation was also notable at 18.02%. Investors’ enthusiasm towards the IPO was duly rewarded, as the listing provided them with an impressive 60% profit. The stock continued to perform exceptionally well, delivering significant profits even on the second trading day.
As per a Moneycontrol report, Anuj Gupta, the Vice President of domestic brokerage firm IIFL Securities, predicts that this stock has the potential to reach Rs 80 within a month, implying a potential increase of 56% based on the closing price. Gupta advises investors to set a stop loss at Rs 38 for this stock.
One of the key factors contributing to the brokerage’s confidence in Utkarsh SFB is its position as the third-largest small finance bank in terms of gross loan portfolio. The bank’s gross loan portfolio demonstrated robust growth at a Compound Annual Growth Rate of 31% to reach Rs 14,000 crore in FY 2019-23. This significant growth has bolstered the brokerage’s outlook for the banking stock.
