ESAF Small Finance Bank hits IPO market
Although the company has presence across the country but its major business is in South.
In a world of IPO, another company has made its entry. That company is from the finance field. The company is ESAF small finance bank. As the name suggests it is small finance bank that caters to rural and semi-uraban customers. It gives retail loans, MSME loans and micro loans among others. Although the company has presence across the country, its major business is in South. This is considered as one of the risks by the brokerages, because North India regions like Bihar, Uttar Pradesh are major areas for microfinance business.
The company is known to follow digital business model across its operations, the company also has digital technology platform. This is givingthe company advantage, at the same time the company has good connect with its customers. The major concern for the company are macro driven, if an economy takes a hit then this company will be impacted significantly. Right now interest rates are high, rural economy is facing headwinds due to El-Nino among other issues. All these pose risk for the company. On the positive side company has witnessed good growth in savings. Its savings has increased at a rate of 20% CAGR from FY21 to FY23. Brokers are generally bullish on the company as Swastika Investmart, Sushil Finance, LKP Securities have given subscribe rating on IPO.
The company is looking to raise Rs 463 crore and out of it Rs 390.7 crore is fresh issue. The company is raising fund to augment it Tier-1 capital. By the time of writing this story it has been completely subscribed. The company is enjoying premium of Rs 22 per share in grey market.