Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd
"Equitas Small finance bank has launched its IPO today, the total size of the IPO is Rs.518cr. The offer included a fresh issue of shares worth Rs.280Cr and an offer for sale of 7,20,00,000 shares by the parent company (Equitas Holding). Equitas SFB raised approx Rs.140 cr through anchor investor on Monday. Today, on the first day of subscription IPO got a subdued response. IPO subscribe 0.39x and primarily supported by retail investors.
At the upper end of the price band, Equitas SFB demands Adj. PB of 1.26x post considering the fresh issue. Though the bank has a diversified loan book and the best CASA ratio among SFBs, the return ratios are subdued with GNPA above 2.5% for last 3 years. Our concern for Equitas SFB is the fresh formation of bad loans from moratorium book that would keep provisions high and return ratios compressed. We believe investors should wait for price discovery before making any investment decisions. Considering above factors, we recommend a NEUTRAL rating for the IPO."
Shares of Equitas Holdings Ltd was last trading in BSE at Rs.49.65 as compared to the previous close of Rs. 49.95. The total number of shares traded during the day was 261979 in over 1778 trades.
The stock hit an intraday high of Rs. 50.75 and intraday low of 49.5. The net turnover during the day was Rs. 13079121.