Muthoot Finance IPO at premium to other NBFCs: Sharekhan
Sharekhan is of the view that at the upper band of the price-band, the initial public offering of Muthoot Finance is available at premium to other NBFCs.
By ET Bureau | Updated:
MUMBAI: Sharekhan is of the view that at the upper band of the price-band, the initial public offering of Muthoot Finance is available at premium to other NBFCs.
The company has entered the primary market with and IPO to raise between Rs 824 crores to Rs 901 crores by issuing shares in the price-band of Rs 160-175 per share.
“At the upper end of the price band the issue is priced at 3.2x M8FY2011 book value, which is at a premium to Manapuram General Finance and the other NBFCs. The premium pricing is due to a leadership position in its segment, strong brand visibility and better operational metrics. However, considering the regulatory risks in the sector and the other macro factors the company should trade at a slight discount to the larger NBFCs,” said Sharekhan report.
The company aims to augment its capital base to meet its future capital requirements to provide for funding of loans to its customers and to receive the benefits of listing of the equity shares on the stock exchange.
The company has entered the primary market with and IPO to raise between Rs 824 crores to Rs 901 crores by issuing shares in the price-band of Rs 160-175 per share.
“At the upper end of the price band the issue is priced at 3.2x M8FY2011 book value, which is at a premium to Manapuram General Finance and the other NBFCs. The premium pricing is due to a leadership position in its segment, strong brand visibility and better operational metrics. However, considering the regulatory risks in the sector and the other macro factors the company should trade at a slight discount to the larger NBFCs,” said Sharekhan report.
The company aims to augment its capital base to meet its future capital requirements to provide for funding of loans to its customers and to receive the benefits of listing of the equity shares on the stock exchange.
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