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Utkarsh Small Finance Bank debuts with 60% premium

July 24, 2023

Utkarsh Small Finance Bank debuts with 60% premium
Utkarsh Small Finance Bank opened with a massive 60 percent premium over issue price on July 21, the listing day, attributed to the strong IPO subscription numbers and bullish market conditions. The benchmark indices hit historic highs this week with the Nifty reaching 20,000 mark.

The stock started off the first-day first trade at ₹40 on the NSE, against the issue price of ₹25 per share, while the listing price on the BSE was ₹39.95.
 
The initial public offering of the small finance bank recorded the second highest subscription numbers after Ideaforge Technology in a current calendar year, subscribing 101.91 times during July 12-14.
 
Qualified institutional buyers were at the forefront with buying shares 124.85 times the allotted quota, followed by high net-worth individuals and retail investors who had bid 81.64 times and 72.11 times the part set aside for them. Employees, too, were aggressive in bidding, whose part was booked 16.58 times.
 
The attractive valuations along with healthy financials, improving asset quality, and reduction in exposure to the unsecured micro banking segment seem to be key reasons that boosted confidence among participants.
 
The Varanasi-based small finance bank raised ₹500 crore which barring issue expenses will be used for augmenting its Tier-1 capital base to meet the future capital requirements which are expected to arise out of growth in its advances. The price band for the offer was ₹23-25 per share.
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