SBFC Finance IPO Review: 14 Crucial Factors to Consider Before Applying for this Upcoming IPO

SBFC Finance Limited, a significant player in India’s Non-Banking Financial sector, is offering an enticing investment opportunity via its Initial Public Offering (IPO). This pan-India financial institution serves entrepreneurs, small business owners, and a diverse array of salaried individuals across 16 states and two union territories.

If you’re an investor looking to diversify your portfolio in the robust Indian financial market, you might be considering SBFC’s IPO. This comprehensive guide will help you assess the investment potential of SBFC’s IPO, analyzing its business model, financials, and the IPO specifics to help you make an informed decision.

Key Details, Numbers, and Dates related to the SBFC Finance IPO

Key Detail	Information
IPO Open Date	Thursday, 3 August 2023
IPO Close Date	Monday, 7 August 2023
Basis of Allotment Date	Thursday, 10 August 2023
Initiation of Refunds Date	Friday, 11 August 2023
Credit of Shares to Demat Date	Monday, 14 August 2023
Listing Date	Wednesday, 16 August 2023
Cut-off time for UPI Confirmation	5 PM on Aug 7, 2023
IPO Price	₹54 to ₹57 per share
Lot Size	260 Shares
Total IPO Size	₹1,025 Crore
Issue Type	Book Built Issue IPO
Listing At	BSE, NSE
Pre-Issue Share Holding	78.83%
Post-Issue Share Holding	64.03%
Market Cap	₹6,065.78 Crore
P/E Ratio	40.42
ROE	9.93%
RoNW	9.93%
Employee Discount	₹2 per share
Face Value	₹10 per share

15 Crucial Things to Know Before Investing in SBFC Finance IPO

1. SBFC Finance – Expansive Presence Across India

SBFC Finance has a substantial pan-India reach. The company has made its mark in over 105 cities across 16 Indian states and two union territories, operating through a network of 137 branches.

2. Innovative Approach to Lending

A key factor that sets SBFC Finance apart is their innovative approach to lending. Recognizing the gap in the financial services market, they have strategically focused on serving entrepreneurs and small businesses that are often underserved by traditional banking institutions. They have streamlined their loan approval processes and offer more flexible terms, making it easier for these businesses to secure the necessary funding. This innovative approach not only fills a market need but also positions the company for potential growth as these businesses expand and require additional services.

3. SBFC Finance IPO Specifics

The SBFC Finance IPO is structured as a Book Built Issue, and it totals Rs 1,025.00 Cr. Shares are priced between ₹54 to ₹57 each. Post-IPO, the company plans to list its shares on BSE and NSE.

4. Critical IPO Dates

The SBFC Finance IPO window is open from August 3, 2023, and will close on August 7, 2023.

5. Lot Size and Investment

For this IPO, the minimum lot size is 260 shares, translating to a monetary investment of ₹14,820.

6. Details on Promoter Holding

The company is currently backed by a consortium of promoters, including SBFC Holdings Pte. Ltd., Clermont Financial Pte. Ltd., Arpwood Partners Investment Advisors LLP, Arpwood Capital Private Limited, and Eight45 Services LLP. Pre-IPO, the promoters hold 78.83% of the company. The post-IPO shareholding of promoters is projected to be around 64.03%.

7. IPO Composition: Fresh Issuance and OFS

8. Utilization of Funds

The net proceeds from the IPO are earmarked for future capital requirements, including expansion of operations, regulatory compliance, operating expense payments, and growth opportunity investments.

9. A Look at Company Financials

In terms of financials, SBFC Finance has shown a consistent growth trajectory in assets and revenues. As of March 31, 2023, the company’s total assets were 5,746.44 Crore, with a revenue of 740.36 Crore.

10. Key Performance Indicators

The SBFC Finance IPO has a Market Cap of Rs 6065.78 Cr. Its Price to Earnings (P/E) ratio stands at 40.42, reflecting the company’s profitability.

11. Grey Market Premium and Listing Price

The SBFC Finance IPO commands a grey market premium of +38. This premium indicates a projected listing price of SBFC Finance shares at ₹95 apiece, which is 66.67% higher than the IPO price.

12. Company’s Area of Specialization

SBFC Finance primarily provides loans to entrepreneurs, self-employed individuals, small business owners, and salaried individuals.

13. Expanding Customer Base

The company’s customer base grew significantly from 40,432 in FY20 to 94,997 as of December 2022, underscoring its growing market presence.

14. Lead Managers and Registrar

The SBFC IPO is managed by lead managers from ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company. The registrar for the SBFC IPO is KFin Technologies.

15. Allotment and Listing Timeline

Shares are set to be allotted on August 10, 2023. They will be credited to the allottees’ demat accounts by August 14, 2023. The shares are expected to be listed on BSE and NSE by August 16, 2023.

FAQs

How to apply for SBFC Finance IPO?

SBFC Finance IPO can be applied through any demat account like Paytm Money, Groww, Zerodha, SBI Securities etc.

What is the issue size of the SBFC Finance IPO?

The total issue size of the SBFC Finance IPO is ₹1,025 crore.

What is the price range for the SBFC Finance IPO?

The price range for the SBFC Finance IPO is Rs.54 to Rs.57 per share.

When is the SBFC Finance IPO opening?

The SBFC Finance IPO opens on August 3, 2023.

When is the SBFC Finance IPO closing?

The SBFC Finance IPO closes on August 7, 2023.

What is the listing date of the SBFC Finance IPO?

The expected listing date of the SBFC Finance IPO is August 16, 2023.

What is the use of proceeds from the SBFC Finance IPO?

The proceeds from the IPO will be used to meet future capital requirements resulting from the company’s business expansion, including onward lending, regulatory compliance, operating expenses, and funding growth opportunities.

Final Thoughts on SBFC Finance IPO