Ujjivan Small Finance Bank IPO Subscribed 1.62 Times On Day 1

The initial public offering of Ujjivan Small Finance Bank was fully subscribed on the first day of the share sale, exchange data showed Monday, with retail investors doing the bulk of the buying.

Against an issue size of 12,39,58,333 equity shares, the Ujjivan Small Finance Bank IPO received bids for 20,14,25,600 shares—indicating 1.62 times subscription.

According to National Stock Exchange data, the portion of shares reserved for qualified institutional buyers was subscribed 0.24 times while non-institutional investors picked up 44 percent of the shares earmarked for them. The portion of shares reserved for retail investors witnessed 8.85 times subscription.

The bank, which is the lending arm of Ujjivan Financial Services Ltd., has already sold 7.14 crore shares for Rs 250 crore in a pre-IPO placement.

The small finance bank, according to its red herring prospectus, aims 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 is 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 are 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.