ESAF Small Finance Bank sees bumper debut on bourses; lists over 18% premium; Should you hold or book profit?

ESAF Small Finance Bank’s shares listed at 18% premium over the IPO price on bourses on Friday. The share debuted at Rs 71 on the NSE and Rs 71.90 on the BSE, as compared to the issue price of Rs 60. The investors have made a profit of Rs 11 per share as the scrip gave 18.33% returns to investors on the listing. Ahead of the listing, ESAF Small Finance Bank’sshares’ grey market premium (GMP) rose 26.67%, surpassing the upper end of the share price on offer, indicating a favorable debut on the bourses.

The public issue was subscribed 77 times on the last day of subscription. The Qualified Institutional Buyers (QIBs) category was subscribed 182.66 times, the portion for non-institutional investors received times subscription and Retail Individual Investors (RIIs) quota got oversubscribed by 17.86 times. The IPO comprised a fresh issue of 65,116,667 shares aggregating up to Rs 390.70 crore, and an Offer-For-Sale (OFS) with promoters offloading 12,050,000 shares aggregating up to Rs 72.30 crore. For potential investors, the bidding started at a minimum of 250 equity shares, with subsequent bids in multiples of 250 equity shares. The minimum amount of investment required by retail investors was Rs 15,000.

Promoted by ESAF Financial Holdings (EFHPL), ESAF Small Finance Bank (ESAF SFB) was incorporated on May 5, 2016. The Bank was granted the RBI’s Final Approval to carry on business as an SFB, on November 18, 2016. The ‘ESAF’ brand has been built over more than 27 years, beginning in 1995 when ESAF Foundation started its micro loan activities.