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AU Small Finance Bank jumps 51% on stock market debut

AU Small Finance Bank is the third SFB to be listed

Nikhat Hetavkar  |  Mumbai 

AU Small Finance Bank
AU Small Finance Bank is a retail-focused NBFC

saw its stock surge more than 50 per cent on Monday during its stock market debut. Shares of the company ended at Rs 541, up Rs 183, or 51 per cent over the issue price of Rs 358. The stock moved in the range of Rs 507-545 on the BSE. On the NSE, where trading had halted for three hours, the stock touched a high of Rs 540 and a low of Rs 523.7. Shares worth Rs 2,075 crore changed hands on the BSE and another Rs 178 crore on the NSE.

The spurt in the shares follows huge demand for AU Finance’s shares in its initial public offering (IPO). The Rs 1,900-crore was subscribed nearly 55 times, with high demand across investor segments, particularly institutional investors.

Market players said there was huge demand from foreign institutional investors (FIIs) after the created investment legroom. Before the IPO, holding in the company was at the ceiling of 49 per cent. Sources said after the IPO, the shareholding had dropped to 37 per cent.

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At its current stock price, is valued at nearly five times its adjusted book value. Analysts say even though the company has strong asset quality and superior track record, the stock is expensive compared to its peers. At Monday’s close, was valued at Rs 15,384 crore.

is a retail-focused non-banking finance company (NBFC). It converted itself into a small finance bank (SFB) in April. It was among the 10 entities that were granted approval by the Reserve Bank of India (RBI) to set up SFBs in September 2015. However, AU is the only asset finance to receive the SFB licence.

is the third SFB to be listed, preceded by Equitas Small Finance Bank and Ujjivan Small Finance Bank in the previous year. AU has three major products in its portfolio — vehicle loans, MSME loans and SME loans. Vehicle loans comprised more than half of their assets under management (AUM).  

“With an issue size of over Rs 1,900 crore, it was one of the largest issues to hit the capital in calendar year 2017. This issue received an overwhelming response from various categories of investors with an overall subscription of 55 times. This is testimony to the strong corporate governance, transparency, systems and most importantly management team led by Sanjay Agarwal,” said Ajay Saraf, executive director, ICICI Securities, one of the investment banks that handled the along with HDFC Bank, Motilal Oswal Investment Advisors and Citigroup Global India.

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