The nation's largest microfinance firm, SKS Microfinance, which raised Rs 1,654 crore through its IPO, will start trading on the stock exchanges from tomorrow.
SKS will be the first microfinance firm in India and the second in the world to get listed on a bourse.
Based on the response that SKS Microfinance got for its public offering, which was open between July 28 and August 2, market analysts expect the company will list with a handsome premium on the bourses.
"The IPO had generated a huge response and based on those demands, we can say that listing will at a reasonable premium, if not so high," Geojit BNP Paribas Research Head Alex Mathews said.
The initial public offering (IPO) of the Hyderabad-based company generated robust demand, especially among retail buyers, and was oversubscribed 13.6 times. The public issue of 1.6 crore shares was priced in the range of Rs 850 to 985 a share.
"SKS Microfinance's IPO is a reflection of tendencies of market recovery. As it always happens, investors (especially retail) join the party only after valuations get stretched. That has started to happen again," Delhi-based SMC Capitals Equity Head Jagannadham Thunuguntla said.
The company, founded by Vikram Akula, has fixed the issue price of its IPO at Rs 985 per share, the upper band of the price range. Retail investors got SKS shares at a discount of Rs 50 per piece at Rs 935 per share.
"Despite being highly priced, the IPO successfully roped in many big investors and also saw huge participation from retail investors. We hope, it will list with a handsome gain," said an analyst, who did not want to be named.
"Several listings in the recent past, like of Hindustan Media Ventures and Technofab Engineering, have been encouraging and in that context, we can say SKS is likely to see good gains on the first day," he added.
SKS is backed by several big private equity players, like Sequoia Capital. Catamaran Management Services, a fund run by Infosys co-founder and chief mentor NR Narayana Murthy, has also invested in the firm. It was the first such investment by Catamaran.
The company plans to utilise the proceeds from the IPO to meet its future capital needs.
