Utkarsh Small Finance Bank's stock soars nearly 92% on market debut

Utkarsh Small Finance Bank’s market value nearly doubled during their stock market debut on Friday, continuing with the recent trend of strong day-one performance following initial public offerings (IPOs).  The Varanasi, Uttar Pradesh-based lender to small enterprises saw its stock close at Rs 48, up Rs 23, or 92 per cent, over its IPO price of Rs 25. Utkarsh SFB joins Cyient DLM and ideaForge Technology to get listed this month and see their stock price soar more than 90 per cent. All the three IPOs saw huge oversubscriptions. Utkarsh SFB’s IPO was subscribed more than 100 times and attracted bids worth Rs 30,000 crore.

In the IPO, Utkarsh SFB raised Rs 500 crore by issuing new shares. The lender plans to use the proceeds for augmenting its tier-1 capital base to grow its business. At the last close, the SFB is valued at 5,254 crore, up from Rs 2,740 crore valuation it assigned for the maiden share sale.

Experts said the investors are drawn to Utkarsh SFB’s strong growth prospects and attractive margins.

In FY23, its net interest income (NII) grew 44 year-on-year to Rs 1,529 crore, while net interest margin (NIM) improved to 9.6 per cent from 8.8 per cent in FY22.