AU Small Finance Bank Shares Surges Over 50% On Market Debut

AU Small Finance Bank IPO, which ended on June 30, was subscribed 53.6 times led by strong demand from non-institutional investors.

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AU Small Finance Bank Shares Surges Over 50% On Market Debut

AU Small Finance Bank's net profit has grown at a CAGR of 48 per cent over FY2013-17.

AU Small Finance Bank, one of the ten non-banking financial companies (NBFCs) which had obtained approvals from RBI for setting up a small finance bank (SFB), made a stellar market debut today. Its shares rose as much as 52 per cent to an intraday high of Rs 544 compared to its issue price of Rs 358. AU Small Finance Bank IPO, which ended on June 30, was subscribed 53.6 times led by strong demand from non-institutional investors (NII). The segment for NIIs was subscribed a staggering 143.51 times.

The Rs. 1,913 crore IPO of AU Small Finance Bank was purely an offer for sale as the company did not raise any fresh capital through this issue.

AU Small Finance Bank, formerly known as AU Financiers, started its operations in 1996 as an NBFC. It received a license from the RBI to set up a small finance bank in December 2016 and commenced operations from April this year. It finances mainly assets having revenue generating potential. Its product portfolio mainly includes secured loans like vehicle finance (50 per cent), MSME (30 per cent) and SME (20 per cent). Angel Broking says, all the above segments have "enough scope for growth in India" and hence, AU Small Finance Bank will continue to expand its book in the secured loan space without relying on the unsecured loan space for its growth.

AU Small Finance Bank had reported a net profit of Rs. 326 crore on net interest income of Rs. 917 crore in financial year 2017. It net profit has grown at a CAGR of 48 per cent over FY2013-17. AU Small Finance Bank's focused approach towards asset financing and the ability to find out gaps and the underserved sections of the vehicle finance, SME and MSME segments has helped the company in achieving this growth, said Angel Broking.

As of 10.05 am, AU Small Finance Bank shares traded 44.13 per cent higher at Rs 516.

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