Fusion Micro Finance Share Price: Shares of Fusion Micro Finance made their stock market debut today, Tuesday, November 15, 2022. The share opened at a discount of 2.3 percent to its issue price of Rs 368. The share started trading at Rs 360.50 on the BSE, while the listing price on the NSE was Rs 359.50.
Investors have so far purchased 66.36 lakh shares at an offering size of 2.13 crore shares, according to data available on exchanges.
Non-institutional investors, or high net worth individuals, bid for 65 percent of the allotted share quota, while private investors bought 33 percent of their share.
The portion reserved for qualified institutional buyers (QIBs), who play an important role in an IPO, is subscribed to just 0.004 percent – bids have been received for 26,960 shares against a quota of 59.56 lakh shares.
The price range for the public offering is set at Rs 350-368 per share. The face value of the equity is Rs 10 each.
Investors can bid on a minimum of 40 shares and then in multiples of 40 shares. It allows retail investors to make a minimum investment of Rs 14,720 per lot. At most, they can purchase shares worth Rs 1,91,360 for 13 lots.
The company will raise Rs 1,106 crore through its initial public offering consisting of a new share issue worth Rs 600 crore, and an offer for sale (OFS) of 1.36 crore shares by the promoters and investors.
The promoters Devesh Sachdev, Mini Sachdev, Honey Rose Investment and Creation Investments Fusion LLC will be selling 35.5 lakh shares through the OFS. And investors Oikocredit Ecumenical Development Cooperative Society UA and Global Impact Funds SCA SICAR will respectively sell 66.06 lakh shares and 35.39 lakh shares through the OFS.
Fusion Micro Finance provides financial services to disadvantaged and disadvantaged women in rural and peri-rural areas across India. It has the fourth fastest gross loan portfolio and is growing at a CAGR of about 54 percent between FY17-21, according to CRISIL.
However, analysts are not too optimistic about the stock. “The majority of revenue comes from certain states (Bihar, Uttar Pradesh, Odisha, Madhya Pradesh, Tamil Nadu, Punjab, Rajasthan) and businesses are exposed to interest rate risk and debt to equity ratio,” said Narendra Solanki, Head -Equity Research. at Anand Rathi Shares & Stock Brokers.
Should investors buy, sell or hold?
Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd., said, “Fusion Microfinance: Debuted at Rs. 359 pe (-2.5%) above the issue price. The company’s muted listing can be attributed to unexciting investor subscription levels, high valuation and the OFS nature of the issue. Fusion Microfinance is one such company that ranks among the top 10 NBFC MFIs in India. It offers loans to female entrepreneurs. The company operates on a joint liability group lending model, where a small number of women form a group and guarantee each other’s loans. The company’s margins are now falling and it is at risk because of the class of borrowers it serves. An increase in the level of NPAs could also be a concern for the company. Second, the company claims a price book (P/B) multiple of 1.8 on a post-IPO basis, while its peers like CreditAccess command a P/B of 3.3. Those who have signed up for listing profits can maintain a stop loss of Rs.340.
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