The ESAF Small Finance Bank’s Initial Public Offering (IPO) stands out as an example of growth and opportunity in the developing Indian financial system. ESAF, which was founded with the goal of empowering those who are economically disadvantaged and bringing them into the mainstream economic fold, is taking a huge step forward by going public.
The IPO intends to raise ₹463 crore, reflecting the bank’s ambitious expansion plans and commitment to promoting financial inclusion at scale. This capital infusion, which is a combination of a fresh issue of ₹391 crore and an Offer for Sale (OFS) of ₹72 crore, is expected to strengthen the bank’s capital foundation and support its strategic goals to expand its reach and improve its services.
ESAF Small Finance Bank started its public offering last Friday, and by the second day, which is Monday, November 6, the process of collecting bids is ongoing. The bank aims to raise ₹463 crore through this share sale, which is scheduled to end on November 7. As of the morning of the second day, the demand for shares has already surpassed the supply by more than double.
ESAF Price Band and Listing Date on BSE
|IPO Grey Market Premium (GMP)||₹20|
|Price Band||₹57 – ₹60|
|Minimum Lot Size||250 Shares|
|Minimum Investment for Retail||₹15,000|
|IPO Listing Date on BSE and NSE||16 November, 2023|
The ESAF Small Finance Bank has announced its entry into the market, with shares priced between 57 and 60 cents per share. To participate, retail investors can start with a minimum lot size of 250 shares, translating into an investment of ₹15,000.
ESAF Small Finance Bank is set to make its debut on two of India’s premier stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), on November 16, 2023.
ESAF Small Finance Bank’s GMP
Grey Market Premium, or GMP, is a key phrase in IPO terms, serving as a test of credibility for the public’s expectations of a company’s stock before it is officially listed on the stock exchange. GMP is essentially the additional amount that investors are ready to pay for a stock above the IPO price.
A positive GMP, such as the 20 for ESAF Small Finance Bank’s IPO, suggests the market expects the company to open at a higher price than the IPO has set, reflecting an optimistic outlook among investors.
Diverse Investor Appeal and Subscription Rate
The subscription figures for the ESAF Small Finance Bank IPO reveal a wide base of interest among different investor classes. Individual investors, often referred to as retail investors, have shown extraordinary enthusiasm by subscribing to 3.73 times the shares available to them. This level of demand is a clear indicator of the bank’s appeal to the general public.
On the other side, larger private entities, known as non-institutional investors, displayed even greater eagerness, seeking out 6.67 times the shares allocated for their category, signalling strong confidence in the bank’s value proposition.
Meanwhile, institutional investors, typically more calculated in their approach, subscribed to a near-complete uptake of their share quota at 0.92 times, suggesting a careful yet positive outlook. Also, the company has reserved 1.40 times shares for the ESAAF employees.