Brief note on the SBFC Finance IPO issue
A brief overview of the SBFC Finance IPO reveals that it amounts to ₹1,025 crore, consisting of both an offer for sale (OFS) and a fresh issue of shares. While the fresh issue infuses new capital into the company, it also dilutes earnings per share (EPS) and equity. In contrast, the OFS involves the transfer of shares, thus no fresh funds are raised, and there is no equity dilution. The pricing band for the book-built issue is yet to be determined, which will subsequently determine the number of shares issued. Currently, what we do know is that SBFC Finance’s IPO includes a ₹600 crore fresh issue and a ₹425 crore OFS.
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Who is selling in the offer for sale?
The promoters and early shareholders partaking in the OFS of SBFC Finance Ltd include SBFC Holdings Pte Ltd, Clermont Financial Pte Ltd, Arpwood Partners Investment Advisors LLP, Arpwood Capital Partners, and Eight45 Services LLP. The fresh issue component, valued at ₹600 crore, aims to bolster the company’s capital buffers to support loan growth. Consequently, the overall size of the IPO amounts to ₹1,025 crore, combining the fresh issue and OFS.
The subscription for this IPO opens on August 3, 2023, and closes on August 7, 2023, with the basis of allotment set for August 10, 2023. Refunds will be initiated on August 11, 2023, and demat credits are expected on August 14, 2023. The stock is scheduled to list on both the NSE and the BSE on August 16, 2023.
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About grey market pricing of the shares
Regarding the grey market pricing of the shares, the Grey Market Premium (GMP) typically commences trading about 4-5 days before the IPO opens and continues until the listing date. GMP is influenced by market conditions, including Nifty and Sensex levels, as well as broader IPO market and macroeconomic conditions. Additionally, the extent of subscription across the retail and QIB segments significantly impacts GMP, often surging when QIB subscription is strong.
What does the SBFC Finance IPO GMP tell us about likely listing price?
It’s important to note that GMP is an unofficial price point but often serves as an indicator of IPO demand and expected post-listing performance. Thus, analyzing the SBFC Finance IPO GMP provides insights into the likely listing price and market sentiment.