Equitas SFB IPO: Attractive play on diversification and valuation

At the price point of Rs 32 - 33, reasonable upside is left on the table for investors

Considering the pent up expectation around the initial public offering (IPO) of Equitas Small Finance Bank (Equitas SFB) and the manner in which foreign and domestic investors have lapped up banking stocks since July, the issue holds promise. What makes it attractive is its pricing of Rs 32 – 33 a share, which works to 1.2x FY21 estimates book, a discount to Ujjivan SFB (1.8x FY21 estimated book, its immediate peer) and AU SFB (5.1x). Thus, valuations leave upside potential for investors. Analysts, however, say one should not expect huge listing gains. 
 

“If investors are expecting Ujjivan SFB-like listing performance,