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CreditAccess IPO gets tepid response, garners just 2.2 times subscription

Institutional investor portion subscribed five times, wealthy and retail investor remain unsubscribed

BS Reporter  |  Mumbai 

Illustration: Ajay Mohanty

Bengaluru-based Grameen's initial public offering (IPO) got a lukewarm response from investors with the offering garnering just 2.2 times subscription.

The portion of the was subscribed five times, while the wealthy and remained unsubscribed. CreditAccess's comprises of fresh equity issuance worth Rs 6.3 billion and secondary share sale worth Rs 5 billion.

The for the was Rs 418 to Rs 422 per share. At the top end of the price band, will have post-issue of Rs 60.5 billion.

The IPO was priced at nearly three times its 2017-18 book value (post-issue basis) and nearly 35 times its 2017-18 earnings. The IPO closes on Friday.

"The near term looks great for Grameen, thanks to huge capital infusion and strong growth. However, the long term needs hard thinking - demonetisation has illustrated that even well run MFIs can lose 5 per cent to 10 per cent of assets in crisis," had said in a note advising its clients to 'avoid' the IPO.


First Published: Fri, August 10 2018. 22:01 IST