Jana Small Finance Bank Lists at a Discount at Rs 396 per share

Jana Small Finance Bank Limited is a non-banking finance company primarily engaged in providing MSME loans, affordable housing loans, term loans to NBFC, loans against fixed deposits, two-wheeler loans, and gold loans, debuted on the Indian stock market today.

The Jana Small Finance Bank stock opened at Rs 396 per share, reflecting a discount of 4.4% compared to the final issue price of Rs 414 per share, both on BSE and NSE. The market capitalisation of the company stands at Rs 4,211 crore on the BSE.

IPO Proceeds:

The bank intends to allocate the Net Proceeds from the Fresh Issue to augment the Bank’s Tier-1 capital base, thereby addressing future capital requirements. Additionally, the funds generated through the Fresh Issue will be utilised to cover expenses associated with the Offer.

Company profile:

Incorporated in July 2006, Jana Small Finance Bank Limited is a non-banking finance company primarily engaged in providing MSME loans, affordable housing loans, term loans to NBFC, loans against fixed deposits, two-wheeler loans, and gold loans.

Jana SFB offers various unsecured loan products, including individual and micro business loans, agricultural and allied loans, and group loans. The bank classifies loans into three categories: individual loans for home improvement/repair, individual loans for school fees, and individual personal loans for debt consolidation, family functions, incidental expenses, and business purposes.

Subscription details:

On February 09, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 19.89 times. The public issue received remarkable interest, with the retail category being subscribed 5.70 times, while the QIB and NII categories reached a subscription rate of 39.81 and 26.13 times respectively.

The IPO price band was between Rs 393 and Rs 414, with a face value of Rs 10 per share and a lot size of 36 shares. The total size of the company’s IPO was Rs 570 crore, and the final share issue price was fixed at Rs 414 each.

Financial Performance:

Conclusion: 

The key dilemma for investors lies in whether to hold onto their shares. Those who applied for the IPO solely with the intention of capitalising on listing gains have been disappointed, as the stock debuted at a discount. Investors who applied for the IPO purely for listing gains may consider closing their positions. Conversely, investors with a higher risk tolerance might choose to hold onto their shares for the medium to long term, as this strategy could potentially yield benefits over time.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.