Utkarsh Small Finance IPO opens today; issue fully subscribed in first two hours

12 Jul 2023 , 12:39 PM

Utkarsh Small Finance Bank’s initial public offering (IPO) has witnessed heavy demand from retail and non-institutional investors, leading to full subscription within the first two hours of opening. The company had set the price band for the IPO at Rs 23 to 25 per equity share.

Prior to the IPO, Utkarsh Small Finance Bank raised Rs 222.75 crore from 20 anchor investors on July 11. The allocation of 8.91 crore equity shares to anchor investors was finalized at an upper price band of Rs 25 per share, as stated in the company’s exchange filing.

The strong response from investors during the initial hours of the IPO indicates the market’s positive reception towards Utkarsh Small Finance Bank’s offering.

At 12.06 PM on day 1 of the issue, the issue is subscribed 1.04 times. Check table for more subscription details:

Category	No.of shares offered / reserved	No.of shares offered / reserved	No. of times of total meant for the category
Qualified Institutional Buyers (QIBs)	6,45,65,217	58,800	0.00
Non Institutional Investors(NIIS)	3,22,82,608	4,08,03,600	1.26
Retail Individual Investors (RIIs)	2,15,21,739	8,33,83,200	3.87
Employee Reserved	21,73,913	10,17,600	0.47
Total	12,05,43,477	12,52,63,200	1.04

(Source: BSE)

At the upper price band of Rs 25 per share, Utkarsh Small Finance Bank’s valuation stands at a price-to-book (P/B) ratio of 1.39x. This indicates that the market is valuing the bank’s equity at approximately 1.39 times its book value.

With the post-issue of equity shares, the company’s market capitalization is estimated to be Rs 2,740 crore. This represents the total market value of the bank’s outstanding shares.

Additionally, Utkarsh Small Finance Bank has reported a return on net worth (RoNW) of 20.22%. RoNW is a measure of a company’s profitability relative to its shareholders’ equity, indicating the return generated on the investment made by shareholders.