IPO anniversary: Equitas Small Finance Bank’s journey and impressive returns

Equitas Small Finance Bank completed its IPO journey, marking three years today. On this day in 2020, the stock made its debut in the Indian market. In this article, we will explore its journey and calculate the returns generated during its journey.

The IPO opened on October 20, 2020, and closed on October 22, 2020. During the final day of the IPO window, it garnered a subscription rate of just 1.95 times. The public issue received a moderate response, with the retail category oversubscribed by 2.08 times, the QIB category achieving a subscription rate of 3.91 times, and the NII category reaching a subscription rate of 0.22 times.

The IPO price range was set between Rs 32 and Rs 33, with a face value of Rs 10 per share and a lot size of 450 shares. The total size of the Equitas Small Finance Bank’s services primarily revolve around retail banking, with a particular emphasis on micro-finance, commercial vehicle finance, home finance, loans against property, corporate finance, and financing solutions tailored for individuals, as well as micro and small enterprises (MSEs).

IPO was Rs 517 crore, and the final share issue price was fixed at Rs 33 each.

The stock debuted on November 2, 2020, with a 6% discount, opening at Rs 31 per share on the BSE. Investors who applied for listing gains were disappointed during the listing ceremony. On the other hand, investors who held the shares in their portfolio made the right decision.

Today, the company’s shares opened at Rs 95.24 per share and closed at Rs 97.76 per share on the BSE, representing a 196% increase compared to its issue price of Rs 33 per share. Although the stock did not list with a significant premium, on the first IPO anniversary, the stock nearly doubled in price, doubling the value of investors’ investments in just a year.

Investors who placed their trust in the company and held their investments through all the market fluctuations have been handsomely rewarded with impressive returns since its IPO.

Business Overview:

Equitas Small Finance Bank Limited is an Indian banking institution that operates through three key segments: Treasury, Wholesale Banking, and Retail Banking.

The Treasury segment encompasses various financial activities, including managing investment portfolios, income generated from priority sector lending certificates (PSLC), foreign exchange transactions, equities, earnings from derivatives, and money market operations.

The Corporate/Wholesale Banking segment involves extending loans to trusts, partnership firms, corporations, and statutory bodies, excluding those covered under Retail Banking. The Retail Banking segment focuses on providing financial services to individual retail customers, including lending and accepting deposits.

Equitas Small Finance Bank’s services primarily revolve around retail banking, with a particular emphasis on micro-finance, commercial vehicle finance, home finance, loans against property, corporate finance, and financing solutions tailored for individuals, as well as micro and small enterprises (MSEs).

Stock Chart (Monthly):

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.