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Ujjivan Small Finance Bank IPO fully subscribed on Day 1

FE Bureau
The non-institutional buyers category was subscribed 0.44 times according to data available till 5 pm on December 2.

On the back of strong retail participation, Ujjivan Small Finance Bank's Rs 750-crore initial public offering (IPO) was fully subscribed on day 1 with the offer receiving bids amounting to 20.14 crore shares against the 12.06 crore shares put on offer at a price band of Rs 36-37 per share.

According to data from exchanges, the offer was subscribed 8.85 times by retail participants while the qualified institutional buyers (QIBs) category received bids at 0.24 times the offer. The non-institutional buyers category was subscribed 0.44 times according to data available till 5 pm on December 2.

Earlier, the bank which caters to the un-banked urban poor and young middle class customers, mopped in Rs 304 crore from anchor investors of the likes of government of Singapore, Aberdeen Standard, HDFC Life Insurance and Goldman Sachs India among others.

For the quarter ended September 30, the small finance bank (SFB's) total outstanding advances amounted to Rs 12,803 crore, greater than nearly 59% year-on-year (y-o-y) while its asset quality was stable with its gross non-performing assets (NPA) at 0.85% in Q2FY20.

In a bid to make a shift in its loan portfolio which has been dominant in micro-loans, the bank has been introducing new products like affordable housing loans and auto loans. "Share of MFI has declined from 97.5% in FY17 to 79.2% in H1FY20. Such a shift into non-MFI book provides the required product diversification, which will entail growth as well enable asset quality management," according to an ICICI direct report.