Laxmi India Finance IPO Subscribed 88% on Day 2, Retail Portion Fully Booked
The shadow lender's public issue sees strong demand from retail investors and employees, though institutional bidding remains subdued ahead of the final day.
Mumbai, July 30: The initial public offering (IPO) of Laxmi India Finance has seen a steady response from investors, with the issue being subscribed 0.88 times by the end of Day 2 of bidding on Wednesday. The non-banking financial company (NBFC) received bids for 99.78 lakh shares against the 1.13 crore shares on offer.
The public issue witnessed robust demand from retail investors, whose category was oversubscribed at 1.28 times. The employee quota also crossed the line, with a subscription of 1.02 times. However, interest from other categories remained muted, with the non-institutional investor (NII) portion booked 0.52 times and the qualified institutional buyer (QIB) segment seeing bids for 0.45 times its allotted shares.
The IPO, which opened for subscription on Tuesday, July 29, will close on Thursday, July 31.
Grey Market Premium and Listing Expectations
In the unlisted market, shares of Laxmi India Finance were commanding a Grey Market Premium (GMP) of ₹8.25. This suggests a potential listing price of ₹166.25 per share, representing a modest gain of 5.22% over the upper end of the IPO price band.
Investors should note that the GMP is an informal indicator of market sentiment and is not a guaranteed predictor of listing performance, as it can change rapidly.
IPO Details and Objectives
Laxmi India Finance aims to raise ₹254.26 crore through its public offering. The issue comprises a fresh issue of shares worth ₹165.17 crore and an offer-for-sale (OFS) of up to 56.38 lakh shares, amounting to ₹89.09 crore. The company has set the price band for the IPO at ₹150-158 per share, with a minimum investment lot of 94 equity shares.
The net proceeds from the fresh issue will be utilized to strengthen the company’s capital base to support future growth and for general corporate purposes.
Ahead of the IPO, the company successfully raised ₹75.5 crore from anchor investors, including Saint Capital Fund, BNP Paribas Financial Markets, and Cognizant Capital Dynamic Opportunities Fund, by allotting shares at the upper price band of ₹158.
About the Company
Incorporated in 1996, Laxmi India Finance is a seasoned player in the lending space, focusing on providing financial solutions to small businesses and entrepreneurs. Its portfolio includes loans for Micro, Small, and Medium Enterprises (MSMEs), vehicle loans, and construction finance. The company highlights that over 80% of its MSME loans qualify under the priority sector lending norms.
The company has demonstrated strong financial growth. For the fiscal year ended March 31, 2024, it reported a net profit of ₹36.01 crore on revenue of ₹248.04 crore, a significant increase from the previous year’s net profit of ₹22.47 crore and revenue of ₹175.02 crore.
PL Capital Markets is the book-running lead manager for the issue. The shares are expected to be listed on both the BSE and NSE on Tuesday, August 5.
