KFin Technologies likely to make tepid market debut today, suggests grey market trend

KFin Technologies, whose Rs 1,500 crore  IPO ran from December 19 to December 21, is likely to make a muted debut on Thursday. Last heard, the issue was commanding a grey market discount of Rs 5 over the IPO issue price of Rs 366, suggesting a 1 per cent listing discount at market debut. The grey market trend for KFin Technologies was negative for at least three days.

A number of recent debutants have seen weak market listings. Landmark Cars got listed at a 7 per cent discount. Uniparts India also had a muted market debut. Sula Vineyards, on the other hand, had debuted at mere 1 per cent premium over its issue price.

A total of 40 mainboard IPOs mobilised Rs 59,412 crore in 2022. This was against  63 IPOs fetching funds worth Rs 1,18,723 crore in 2021. In 2022, IPOs were mainly concentrated in three major sectors namely edible oil, insurance and hospital & healthcare services. As per a report by Bank of Baroda’s Economics Research Department, the three sectors accounted for 56 per cent of the total issuances in the year. This was against 2021 where chemicals, insurance and finance, e-commerce and automobile sectors dominated the IPO list.

In the case of KFin Technologies, the IPO had received 2.59 times bids. The initial share sale attracted bids for 6,14,67,520 shares against 2,37,75,215 shares on offer. The quota for qualified institutional buyers (QIBs) was subscribed 4.17 times, while the category for retail individual investors (RIIs) received 1.36 times subscription and non-institutional investors got 23 per cent subscription.

YES Securities which had an 'Avoid' rating on the issue said that idiosyncratic positives may prove to be transient for the domestic Investor Solutions business and that the macro environment is also tough for KFin Technologies.

"For international Investor Solutions, while the opportunity size seems large, it is not clear what the real opportunity size is. The Issuer Solutions business has grown at a reasonable pace but primary market activity may have peaked.  Global business services does not seem to be a growth business for KFIN. Besides, KFIN lags CAMS materially on the profitability front," the brokerage had noted.

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