The initial public offering (IPO) of Fusion Micro Finance got subscribed nearly 3 times on the final day of bidding on Friday. The initial share sale received bids for 6,30,35,880 shares against 2,13,75,525 shares on offer, according to BSE data.
The non-institutional investors’ category received 1.38 times subscription by 5:40┬аpm, while qualified institutional buyers (QIBs) got subscribed 8.59 times. The retail individual investors’ portion was booked 51 per cent, taking the total IPO subscription to 2.95 times.
With a price range of Rs 350-368 a share, the IPO has a fresh issue of up to Rs 600 crore and an offer for sale (OFS) of up to 1,36,95,466 equity shares.┬аInvestors can bid for a minimum of 40 shares and in multiples thereof.
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Fusion Micro Finance has raised Rs 331 crore from anchor investors ahead of its IPO.
Latest grey market premium
Market participants said Fusion Micro Finance IPO’s grey market premium (GMP) was nil. It implies that the grey market is expecting the microfinance lender to list on a flat note.
“On the operational front, the top line is growing somewhat while the bottom line remains inconsistent. The issue looks richly priced at over 2.27 times its book value. Also, the clash of multiple IPOs may divide investors’ participation,” Manan Doshi, UnlistedArena.com, told Business Today.
Brokerage view
Angel One has a ‘Neutral’ rating on the issue. It believes investors may consider investing in Fusion Micro Finance from a medium to long-term perspective.
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ICICIdirect said competition from other MFIs, banks and financial institutions and substantial collections and disbursements in cash are among key risks. The brokerage didn’t rate the IPO.
Meanwhile, the company said that net proceeds of the fresh issue would be used to augment the capital base of the microfinance firm.
IIFL Securities, ICICI Securities, CLSA India and JM Financial are the managers of the offer.
