Capital Small Finance Bank’s stock price fell further due to poor listing. Should I sell it?

Capital Small Finance Bank stock price: Capital Small Finance Bank is Weak market debut Wednesday, February 14th.The stock is INR430.25 on the NSE, indicating a discount of 8.07% from the IPO price. INR468. At the same time, the stock debuted on the BSE. INR435 dollars, down 7% from the issue price.

During the day, stock prices hit intraday lows. INR421.10, down 10 percent from IPO price on BSE and intraday high INRAt $462.95, it is also 1% below the company’s issue price.

Given the slump in the listed market, experts recommend staying away from stocks.

“Capital Small Finance Bank (CSFB) experienced a disappointing debut; INR430.25 on the NSE, reflecting a worrying 8% decline from the issue price. INR468. This negative performance is significantly below pre-listing expectations and casts doubt on investors’ confidence in the bank’s future prospects. This negative listing highlights potential investor concerns about CSFB’s valuation, future growth prospects, or the small finance banking sector as a whole. Additionally, the small finance banking sector is highly competitive, requiring continuous performance improvement and strategic innovation. Today we witnessed the listing of two small finance banks.

Negative listing requires a cautious approach to CSFB. However, there is a view to avoid these stocks and prioritize investments in blue-chip stocks in the sector,” said Shivani Nyati, head of wealth at Swastika Investmart.

However, analysts initially expressed optimism about the IPO, highlighting the company’s strong credit evaluation procedures and effective risk management practices.

“Capital Small Finance Bank is a retail debt franchise with a high share of CASA. It has a highly secure and diversified portfolio. Its credit evaluation process and risk management practices ensure good asset quality and low delinquencies. They understand.” “Over the years we have been able to increase our reputation in the market and our customer base and meet the financial requirements of existing and potential customers. We believe the valuation is fair and recommend a ‘long subscription’ rating for the IPO,” brokerage Anand Rati said in an IPO review note.

Capital Small Finance Bank was established in 2016 as India’s first small finance bank and operates with a focus on offering diversified banking products on both asset and liability sides.

of INRCapital Small Finance Bank’s 523 million share initial public offering (IPO) will be open for subscription from February 7 to February 9, with price ranges as follows: INR445-468.

Overall, the issue had a significant number of subscribers over the three days of bidding, being subscribed 4.17 times. There were bids for 3.26 billion shares of the 78.23 million shares offered. The bid for the Qualified Institutional Investor (QIB) category was 6.85x, while the bid for the Non-Institutional Investor (NII) category was 4.23x. On the other hand, the number of subscribers for individual investors was 2.6 times higher.

Capital Small Finance Bank IPO Details

This issuance is combined with a new issuance of 9.6 million shares. INRThe total sale price is 450 million dollars and is as follows: INR73 billion 70 million. The minimum lot size for applications is 32 shares and multiples thereof. The minimum investment amount required for an individual investor is INR14,976.

The bank proposes to utilize the net proceeds from the new issue to augment its Tier-I capital base to meet future capital requirements. In addition, proceeds from the new issue will also be used to cover costs associated with the offer.

Nuvama Wealth Management Limited, Dam Capital Advisors Ltd (formerly IDFC Securities Ltd) and Equirus Capital Private Limited are the book-running lead managers for the Capital SFB IPO and Link Intime India Private Ltd is the registrar for the issue.

About Capital Small Finance Bank

In 2015, Capital SFB became the first non-NBFC microfinance entity to obtain an SFB license. The company follows a branch-based operating model and has a strong presence in semi-urban and rural areas. Capital Small Finance Bank is headquartered in Jalandhar, Punjab and has strategically expanded his SFB operations across northern Indian states such as Punjab, Haryana, Rajasthan, Delhi, Himachal Pradesh and UT Chandigarh. Masu.

As on June 30, 2023, Capital Small Finance Bank has a presence in five states and one union territory with a total of 172 branches and 174 ATMs. As of September 2023, the bank’s branch distribution is 42% in rural areas, 34% in semi-urban areas, and 24% in urban areas.

Disclaimer: The views and recommendations above are those of individual analysts or brokerages and not of Mint. We recommend checking with a certified professional before making any investment decisions.