The initial public offering (IPO) of Akme Fintrade India continued to see a strong response from the investors during the second day of the bidding process. After being fully subscribed thrice on the first day itself, the issue continued to attract investors from employees, retail and HNI categories.
The Udaipur-based Akme Fintrade India is selling its shares in the price band of Rs 114-120 apiece. Investors can apply for a minimum of 125 and its multiples thereafter. It is looking to raise Rs 132 crore via IPO, which entirely includes a fresh share sale of 1.10 crore equity shares.
According to the data, the investors made bids for 7,38,78,875 equity shares, or 9.39 times, compared to the 78,65,000 equity shares offered for the subscription by 3.25 pm on Thursday, June 20. The three-day bidding for the issue will conclude on Friday, June 21.
The allocation for retail investors was subscribed 12.87 times, while the portion reserved for non-institutional investors saw a subscription of 16.62 times. However, the quota set aside for qualified institutional bidders (QIBs) quota was booked only six per cent times, while the employee portion was booked 1.14 times as of the time.
Incorporated in 1996, Akme Fintrade India is a non-banking financial company (NBFC) with over 20 years of experience in lending to rural and semi-urban areas in India. It mainly provides lending solutions tailored to the needs and aspirations of rural and semi-urban populations. Its portfolio comprises Vehicle Finance and Business Finance Products for small business owners.
The grey market premium of DEE Development has surged slightly amid the strong bidding from the investors. Last heard, the company was commanding a premium of Rs 48-50 in the unofficial market, suggesting a listing pop of about 40-42 per cent for the investors. However, the premium in the grey market stood around Rs 40 a day earlier.
Brokerage firms remain mixed on the issue, with a positive bias. Some suggest high risk appetite investors to subscribe to the issue on the back of demand for financial services and small issue size. However, others are skeptical on consistency of financial performance, high NPAs, and rich valuations of the company.
Akme Fintrade India is a growing NBFC with a strong presence in rural and semi-urban India. The company focuses on vehicle financing and loans to small businesses and SMEs. Post IPO, the issue is valued at a Price-to-Book value (P/Bv) of 2.5 times, said Arihant Capital Markets with a 'subscribe for listing gain' rating for this issue.
"As of December 2023, the company’s business loan segment, which constitutes 76.08 per cent of the total loan book, has experienced a degrowth of 21.08% from March 2023 levels and the Gross Non-Performing Assets in this segment have increased by 4.56 per cent. We expect the segment’s performance to improve going forward," it added.
Akme Fintrade reported a net profit of Rs 12.25 crore with a revenue of Rs 53.45 crore for the nine month ended on December 31, 2023. The company's bottomline stood at Rs 15.80 crore with a revenue of Rs 69.57 crore for the financial year ended on March 31, 2023.
The company is looking to bolster capital base so it can fund its future capital requirements as the business grows. The company is looking to grow by strategically concentrating on rural and semi-urban sectors with significant growth potential, said Master Capital Trust.
"The NBFC anticipates leveraging its extensive market experience to further enhance financial inclusion and service delivery across India. Given the small size of the company and the valuation of the IPO, we advise to Subscribe to the IPO for listing gains," it added.
Akme Fintrade raised Rs 37.61 crore from three anchor investors by allocating them 31.35 lakh equity shares at an issue price of Rs 120 apiece. It has reserved 50 per cent of the issue for the qualified institutional bidders (QIBs), while non-institutional investors have 15 per cent of the net offer. Remaining 35 per cent of the net offer shall be allocated towards retail investors.
Gretex Corporate Services is the sole book running lead manager of the Aasaan Loans IPO, while Bigshare Services is the registrar for the issue. Shares of the company shall be listed on both NSE and BSE with Wednesday, June 26 to be the tentative date of listing of shares.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
ReplyReply allForward
Attendee panel closed
Conversation flagged for follow up