CreditAccess Grameen IPO subscribed 37% on Day 2
The issue received bids for 50,76,330 shares against the issue of 1,88,29,684.
By ETMarkets.com | Updated:
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NEW DELHI: The initial public offering of micro finance institution (MFI) CreditAccess Grameen got 37 per cent subscription till 5 pm on Thursday.
The Rs 1,131-crore IPO received bids for 69,86,420 shares against the issue of 1,88,29,684.
The portion reserved for qualified institutional buyers (QIBs) was subscribed 79 per cent, non-institutional investors 2 per cent and retail investors 28 per cent.
On the post dilution basis, the issue is available at 2.9 times book value at upper limit. Angel Broking has subscribe rating on the issue while Choice Broking has advised 'subscribe' with caution.
CreditAccess Grameen was the second largest MFI based on the loan amount disbursement in FY17 and the third largest based on gross loan portfolio (GLP) as of March 31.
There is a new kid on the IPO block. CreditAccess Grameen, which deals in microfinance, kicks off its public share sale on Wednesday. Brokerage Hem Securities has a 'Subscribe' on the issue, but with limited upside potential. There's a catch, right? Let's take the curtain off.
The company’s focus customer segment is women with an annual household income of Rs 1.6 lakh or less in urban areas and Rs 1 lakh or less in rural areas. The loans are offered to women, who are willing to borrow in a group and are agreeable to accept joint liability for the loans under Joint Liability Group (JLG) model.
Besides, the company offers individual retail finance loans on a pilot basis to existing customers with at least three years of healthy track record.
A few brokerages still remained positive on the MFI's prospects.
The Rs 1,131-crore IPO received bids for 69,86,420 shares against the issue of 1,88,29,684.
The portion reserved for qualified institutional buyers (QIBs) was subscribed 79 per cent, non-institutional investors 2 per cent and retail investors 28 per cent.
On the post dilution basis, the issue is available at 2.9 times book value at upper limit. Angel Broking has subscribe rating on the issue while Choice Broking has advised 'subscribe' with caution.
CreditAccess Grameen was the second largest MFI based on the loan amount disbursement in FY17 and the third largest based on gross loan portfolio (GLP) as of March 31.
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It reported 65.2 per cent compounded annual growth in net assets under management (AUM) and 56 per cent jump in disbursements from FY14 to FY18. The actual count of customers for the same period has increased by 32.4 per cent, analysts noted.The company’s focus customer segment is women with an annual household income of Rs 1.6 lakh or less in urban areas and Rs 1 lakh or less in rural areas. The loans are offered to women, who are willing to borrow in a group and are agreeable to accept joint liability for the loans under Joint Liability Group (JLG) model.
Besides, the company offers individual retail finance loans on a pilot basis to existing customers with at least three years of healthy track record.
A few brokerages still remained positive on the MFI's prospects.
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"Some of the MFI converted SFB have been trying to scale down their MFI portfolio due to volatility in the asset quality to scale up in other areas. However, we feel MFI as a segment is here to stay in India. While the FY18 RoE of 11.8 per cent is still sub-optimal compared with some of the large MFIs, we feel the valuation adequately captures this and any improvement in the RoE will aid further valuations," SMC Institutional equities said in a note. Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
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