Spandana Sphoorty Financial shares fail to shine on debut, end at Rs 855

Market players said the listing day performance was encouraging, considering the IPO had come amid challenging market conditions

Shares of microfinance company Spandana Sphoorty Financial ended at Rs 855, slightly below the issue price Rs 856, on Monday during its stock market debut.

The scrip fell as much as 19.3 per cent to Rs 691 in intra-day trade on the National Stock Exchange (NSE), where shares worth Rs 373 crore changed hands.

Shares worth another Rs 38 crore changed hands on the BSE, where the stock touched a low of Rs 690 and a high of Rs 865.

Spandana’s Rs 1,200-crore initial public offering (IPO) earlier this month had garnered lukewarm response from investors, particularly retail and high-net-worth individuals (HNIs).

The IPO was subscribed 1.05 times, with nearly 84 per cent of the bids coming from qualified institutional buyers.

The QIB portion of the IPO was subscribed 3.1 times, while the HNI and retail portions were subscribed about 55 per cent and 9 per cent, respectively.

Market players said the listing day performance was encouraging, considering the IPO had come amid challenging market conditions. Stocks across the board —and particularly in the financial sector — have seen huge substantial de-rating in valuations since July.

At the current price, Spandana is valued at 2.7 times its FY19 book value, which many analysts view as favourable, given the company’s growth potential.

Spandana raised Rs 400 crore in fresh capital through the IPO. This will be used for augmenting its capital base and expansion. The company had posted impressive growth in 2018-19, with net profit soaring 70 per cent to Rs 320 crore and gross assets under management growing 40 per cent to Rs 4,437 crore.