Experts predict lukewarm opening for CreditAccess Grameen on August 23. Either the listing will debut on a flat note or a little more than the premium.
The public issue opened on Aug 8 and closed on Aug 10 with the issue price fixed at ₹418 – ₹422 per share. 11,876,485 shares were on sale including 8,041,617 shares of anchor investors. The public issue subscribed 2.22 times mainly by QIB.
Qualified institutional buyer (QIB) subscription was 5.52 times. Non institutional investors subscribed 0.98 times and retail investors subscribed 0.88 times. ICICI Securities, Credit Suisse Securities (India), IIFL Holdings and Kotak Mahindra Capital Company managed the issue
Experts speak
‘Looking at the lower than expected subscription levels in all the categories indicates CreditAccess Grameen (CAG) would list on a softer note (5-10 percent best case) and also expect to drive down below issue price on listing day,’ Prashanth Tapse, AVP Research, Mehta Equities said to Moneycontrol.
Tapse suggests that for long term investors, a price band of ₹480 – ₹500 can be awaited. This is a 14-18% increase on the issue price. And if the stocks remain flat or falls below ₹400 then they can be accumulated since the fundamentals are strong.
‘Micro finance industry has exhibited impressive business growth over the past few years and company with a clear focus on rural customers whose access to the formal banking sector is limited would witness healthy growth going forward,’ Tapse told Moneycontrol.
Company Fundamentals
CreditAccess Grameen Limited provides micro-loans to women in rural areas. The loan disbursements were at ₹34,026.29 million and ₹60,817.22 million for the financial year ending March 31, 2017 and 2018 respectively. And the net interest incomes were at ₹3,852.04 million and ₹5,109.85 million or the financial year ending March 31, 2017 and 2018 respectively.
CreditAccess Asia N.V. (“CAA”) is the company’s promoter and holds 98.88% of the pre-offer issuedand will continue to hold a large portion during post-offer period.