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SBFC FINANCE LTD IPO

Price Range (₹)

Rs. 54 – Rs. 57

Issue Size (₹ in Cr.)

Up to 1025 crores

Minimum Quantity

260 shares

Bidding Period

Aug 03 – Aug 07 , 2023

- A systemically important, non-deposit taking non-banking finance company (“NBFC-ND-SI”) offering Secured MSME Loans and Loans against Gold(Source: CRISIL Report)
-Majority of the borrowers being entrepreneurs, small business owners, self-employed individuals, salaried and working class individuals
-Among MSME-focused NBFCs in India, the company has one of the highest assets under management (“AUM”) growth, at a CAGR of 40% in the period from Fiscal 2019 to Fiscal 2022. (Source: CRISIL Report).

Strengths

Diversified pan-India presence with an extensive network to cater target customer segment
The company has strategically focused expansion within target customer segment which offers significant growth opportunities.As of December 31, 2022, they have an expansive footprint in 105 cities, spanning 16 Indian states and two union territories, with 137 branches(Source: Company DRHP)

100% in-house sourcing, leading to superior business outcomes
They acknowledge the complexities of underwriting loans, and to ensure positive business outcomes, 100% of loan portfolio has in-house origination, limiting reliance on direct selling agents or connectors in order to ensure a more direct, thorough understanding of the customer’s profile.(Source: Company DRHP)

Comprehensive credit assessment, underwriting and risk management framework
Company’s risk management committee has developed risk management policies, addressing credit risk, market risk, liquidity risks and operational risks. Leveraging their significant operational experience, they have set up stringent credit quality checks and customised operating procedures that exist at each stage for comprehensive risk management.(Source: Company DRHP)

Risks

The risk of non-payment or default by borrowers may adversely affect business, results of operations and financial condition.
As of December 31, 2022, they had 3,448 loans, comprising 7.82% of total advances for Secured MSME Loans, extended to borrowers who were new to the formal secured lending ecosystem. Such customers may have a high risk of non-payment or default due to a number of reasons. They cannot assure you that their monitoring and risk management controls will be sufficient to prevent future losses on account of customer defaults, there by adversely affecting business (Source: Company DRHP)

Volatility in interest rates for both lending and treasury operations, could have an adverse effect on net interest income.
An increase in interest rate can add to the financial stress of borrowers, leading to higher delinquencies and may reduce the overall demand for retail loans and impact growth.(Source: Company DRHP)

Financials

Industry Trends

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SBFC Finance IPO FAQs

The price band of SBFC Finance IPO is Rs.54 –Rs.57 per share.

SBFC Finance IPO listing date is Aug 16th ,2023

SBFC Finance IPO shares will be allotted on Aug 10th ,2023

SBFC Finance IPO opens from Aug 03rd,2023 and closes on Aug 07th ,2023 for subscription.

SBFC Finance IPO is mainboard IPO of issue size up to Rs.1025 Crores

The lot size is 260 shares for SBFC Finance IPO

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Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.