Ujjivan Small Finance Bank Pips IRCTC As Most Subscribed IPO In 2019
The Ujjivan Small Finance Bank IPO received bids for 20.52 billion shares against an issue size of 124 million shares.
The initial public offering of Ujjivan Small Finance Bank was subscribed 166 times on the last day of the share sale, exchange data showed on Wednesday, with non-institutional investors doing the bulk of the buying.
In the process, it overtook Indian Railway Catering And Tourism Corporation Ltd. as the most subscribed IPO in 2019, data on the National Stock Exchange website showed. The IRCTC IPO in October was subscribed 112 times, and the company went on to list at double the issue price.
Against an issue size of 124 million equity shares, the Ujjivan Small Finance Bank IPO received bids for 20.53 billion shares—indicating 165.67 times subscription.
The portion of shares reserved for qualified institutional buyers was subscribed 113.80 times while non-institutional investors picked up 486.14 times the shares earmarked for them. The retail portion witnessed 49.50 times subscription while the company’s shareholders picked up 3.27 times the shares reserved for them.
The IPO was subscribed five times on Tuesday, the second day of the share sale, and 1.62 times on Monday. The offering closed today.
The bank, which is the lending arm of Ujjivan Financial Services Ltd., sold 7.14 crore shares for Rs 250 crore in a pre-IPO placement.
The small finance bank, according to its red herring prospectus, aimed to raise nearly Rs 750 crore by issuing new shares of face value Rs 10 each in a price band of Rs 36-37 apiece. The bid lot size was 400 equity shares and multiples thereof.
The lender’s market valuation, after the IPO, would be around Rs 6,242-6,394 crore, according to BloombergQuint’s calculations. Kotak Mahindra Bank, IIFL Securities and JM Financial were the bankers to the issue.
The Dec. 2-4 Ujjivan Small Finance Bank IPO was necessitated to comply with the Reserve Bank of India’s licensing and listing norms. The bank has to pare its promoter shareholding to 40 percent within five years of operations—by February 2022.
“The promoter shareholding will come down to 85 percent post the IPO,” Samit Ghosh, managing director and chief executive officer of Ujjivan Small Finance Bank, had told BloombergQuint in an interview last week. “We want to consider a reverse merger route (to further bring down stake). If it (RBI) doesn’t approve the reverse merger, we have the option of going for an offer for sale.”
Also Read: Ujjivan Small Finance Bank IPO: Here’s All You Need To Know
The mass-market small finance bank caters to unserved and underserved segments, and is present in 24 states and union territories, with 552 banking outlets and 441 automated teller machines. The bank started as a microfinance lender but has diversified by entering the non-microfinance business.