Shares of SBFC Finance saw some follow-up buying on its maiden trading session, after a strong listing on Wednesday. Shares of SBFC Finance were listed at a robust premium of 44 per cent at Dalal Street as the shadow lender was listed at Rs 82 on the National Stock Exchange (NSE) and at Rs 81.99 on BSE compared to the issue price of Rs 57.
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Shares of SBFC Finance saw a strong demand from the investors after its debut and rose about 12 per cent on Monday after listing to hit Rs 91.50 on BSE. The follow-up buying in the counter took the overall gains to more than 60 per cent over the given issue price.
Analysts are divided over the future outlook for the stock. Some analysts suggest investors book profit amid the ongoing volatility in the broader markets. However, a handful of analysts are positive on the stock for the longer run, citing the strong growth potential of the company.
SBFC Finance debuted in the secondary market at a listing price of Rs 82 versus its issue price of Rs 57, making it another intriguing listing. That represents a premium of 44 per cent, although it falls short of earlier projections, a result of broader market volatility, said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.
‘SBFC stands out as a rapidly expanding non-banking financial company (NBFC) with robust earnings growth and stable asset quality. However, it bears the vulnerability of being sensitive to interest rates and market cycles, so in this market, after listing at such a premium, one should book profit, however aggressive investors may hold it for the long term,” he said.
SBFC Finance sold its shares in the range of Rs 54-57 apiece during the three-day bidding process between August 3 to August 7 with a lot size 260 equity shares and its multiples thereafter. The company raised about Rs 1,025 crore from its initial stake sale.
The issue was overall subscribed 74.06 times. The portion for qualified institutional bidders was booked 203.61 times, while the non-institutional investors’ category was subscribed 51.82 times. The quota reserved for retail investors was subscribed 11.60 times, while the employee portion fetched 6.21 times bids.
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We continue to remain optimistic on the company from a medium to long term perspective, banking upon the management’s vast experience, an HDFC background and an in-house sales team, said Shreyansh Shah, Research Analyst at StoxBox.
The lender has a strategic focus on diversifying its loan portfolio across states and we remain comfortable on the credit profiling and corporate governance front, he said. We advise investors who have received allotment to hold on their investment as NBFCs have off late gained importance in the financial sector ecosystem and the growth prospects of the company remains intact,”
Incorporated in 2008, SBFC Finance is a non-banking finance company which provides secured MSME loans and loans against gold primarily to entrepreneurs, small business owners, self-employed individuals, and salaried and working-class individuals. The company has an extensive pan-India network in over 157 Branches in 105 cities in 16 states and two union territories.
“The company however sees great growth potentials in the near future. We suggest investors to hold with stop loss of Rs 74 for target Rs 110-120 in near future as the company has a diversified pan-India presence with an extensive network with good financials,” said Mahesh M. Ojha AVP – Research & Business Development, Hensex Securities.
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SBFC Finance extends its services to entrepreneurs and small business owners who are underserved or unserved by traditional financial institutions. The company has an extensive pan-India network, expanded in over 466 districts in 16 Indian states and two union territories. They currently have 152 branches.
