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Ujjivan SFB IPO: Promising franchise comes at a reasonable valuation

Ability to diversify is well demonstrated; its effectiveness may take a while to reflect on numbers

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4 min read Last Updated : Nov 28 2019 | 11:11 PM IST

Priced at Rs 36–37 a share, the initial public offering (IPO) of Ujjivan Small Finance Bank is positioned attractively for investors. At this price range, valuations work out to be about 1.8x FY20 estimated book value, which is not demanding considering that small finance banks (SFBs) are turning out to be a hotbed for growth, especially in India’s underserved and unserved territories.

To that extent, the potential that these regions hold for Ujjivan SFB is reflected in its growth trajectory of the past three years.

The appealing factor is that when the industry as a whole is vying for growth

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