Usha Financial Services Shares Open 2% Down, Hit Lower Circuit Limit!

On October 31, 2024, Usha Financial Services’ shares debuted at ₹164 each, slightly below the issue price of ₹168, marking a 2.4% discount. The stock experienced further declines, hitting its lower circuit limit of ₹155.80. By around 10:20 AM, shares were trading at ₹161.

IPO Details

The IPO had a price range of ₹160 to ₹168 per share, aiming to raise ₹98.45 crore at the upper price point. It consisted entirely of a fresh issue of 58.6 lakh shares, with no shares offered for sale. The IPO opened for subscription on October 24 and closed on October 28, achieving an impressive overall subscription of about 19 times. 

The retail segment was particularly strong, with subscriptions nearly 21 times, while the non-institutional buyer segment was subscribed 29 times. The qualified institutional buyers’ portion was subscribed 10 times. Narnolia Financial Services and Unistone Capital Pvt Ltd acted as the lead managers, and Skyline Financial Services served as the registrar, with SS Corporate Securities as the market maker. Shares for Usha Financial Services were allotted on October 29. 

Company Overview

Usha Financial Services is a non-banking finance company (NBFC) approved by the Reserve Bank of India as a non-systemically important, non-deposit-taking NBFC in the investment and credit category. With over 9 years of experience in lending, the company offers financial solutions to other NBFCs, corporations, micro, small, and medium enterprises (MSMEs), and individuals, focusing especially on women entrepreneurs. They also provide financing for electric vehicles (EVs).

As of September 30, 2024, Usha Financial Services had assets under management (AUM) of ₹318.17 crore, a capital-to-risk assets ratio (CRAR) of 33.54%, and a debt to equity (D/E) ratio of 1.70. By October 14, 2024, the company employed 42 people. For the period ending September 30, 2024, it reported revenue from operations of ₹26.51 crore and a net profit of ₹5.04 crore.

Market Sentiment

In the broader market, the Nifty 50 index dropped nearly 0.5% in the morning session due to weak global signals. Concerns related to the upcoming US elections, disappointing Q2 results, and continued foreign capital outflows are weighing on market sentiment. 

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.