Utkarsh Small Finance Bank IPO hits Street; should you subscribe?

Utkarsh Small Finance Bank's IPO, worth an estimated Rs 500 crore, will open for subscription on July 12 and close on July 14. The Utkarsh SFB IPO comprises fresh issuance of shares.

Utkarsh Small Finance Bank shares are likely to be listed on bourses NSE and BSE on July 24. | Image: Reuters

Utkarsh Small Finance Bank launched an initial public offer (IPO) on Wednesday to raise up to Rs 500 crore. The IPO of Utkarsh SFB — a Varanasi, Uttar Pradesh-based small finance bank — comprises fresh issuance of shares. Should you subscribe to Utkarsh Small Finance Bank IPO? Here's what market wizard Anil Singhvi suggests.

The IPO was fully subscribed within the first half of the first day of the bidding process. Catch latest on Utkarsh SFB IPO subscription

EDITOR'S TAKE | Apply for listing gains and for long term

Zee Business Managing Editor Anil Singhvi suggests applying for the IPO for "big listing gains" and from a long-term perspective.

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"There is an abundance of growth opportunities in microfinance and SMEs, the space that this lender caters to, as well as the core geographies where it operates," Singhvi pointed out.

The valuation is more attractive than its peers, he added.

Here's a summary of key points about the small finance bank, as highlighted by Singhvi:

Positive

Promoters' strong background
Huge growth opportunity
Attractive valuation

Negative

Cost of funds higher than peers
Asset quality not stable
Profit jumped just before IPO

Here are some of the key details about the Utkarsh SFB IPO:

Timings/important dates: The bidding process will take place for three trading days, till July 14. The subscription window, opening on Wednesday, will be available from 10 am to 5 pm.

Utkarsh Small Finance Bank shares are likely to be listed on bourses BSE and NSE on July 24, with the basis of allotment to be finalised on July 19 and the credit of shares to take place on July 21.

Issue price/lot size: Under the IPO, potential investors can bid for Utkarsh Small Finance Bank shares in a range of Rs 23-25 apiece in multiples of 600, translating to Rs 13,8000-15,000 per lot.

Investor reservation: