HDFC Securities is of the view that the initial public offering of SKS Microfinance is exclusive but still can give listing profits.
“SKSML has issued shares in the past 15 months to private equity investors @ Rs.300 per share. The current issue is priced a bit on the expensive side. Its smaller peer SE Investments has also risen 200% over the past 4-5 months aided by Bonus and split announcements. On a relative basis with its peer, SKSML does not seem too luxurious.
On the other hand, compared to Banks and Finance companies, it seems luxurious based on P/E, dividend yield and P/BV basis. On a post issue basis, however the P/BV could come downhill, mainly due to the premium collected in the issue. Given its size, the present institutional investors, the recent growth and prospects going forward and the fancy towards the sector, the issue could still give some listing gains,” the report said.
SKS Microfinance has entered the capital market to offer 16,791,579 shares in the price-band of Rs 850-985 per share.
It plans to use the earnings to augment capital base to meet future capital requirements and to realize the benefits of listing on the stock exchanges. The issue closes Monday.
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