Solid listing: AU Small Finance Bank ends near day’s high, up 51% over issue price

Solid listing: AU Small Finance Bank ends near day's high, up 51% over issue price

AU Small Finance Bank made a solid debut on the BSE on Monday, rising as much as 52.23 percent over its issue price of Rs 358. However, the trading on National Stock Exchange delayed by three hours due to technical glitch at the exchange.

The stock closed at Rs 541.20 on the BSE, up 51.17 percent with volumes of 3.92 crore shares, after hitting an intraday high of Rs 545 and low of Rs 506.80.

It settled at Rs 525 in pre-opening trade on exchanges.

The bumper listing was on expected lines, given the overwhelming response to public issue and the hefty grey market premium.

AU Small Finance Bank is the first one to list on exchanges among small finance banks that received license from the Reserve Bank of India.

The RBI started issuing license to run Small Finance Bank after releasing guidelines in 2014. The objectives of setting up of small finance banks is to further financial inclusion by provision of savings vehicles, and supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations.

AU Small Finance Bank received a license from the Reserve Bank of India to set up a small finance bank in December 2016 and commenced operations from April this year.

AU operates in three business lines – vehicle finance; micro, small and medium enterprises (MSME) loans; and small and medium enterprises (SME) loans.

The Rs 1,912-crore initial public offer of AU Small Finance Bank was opened for subscription during June 28-30 and oversubscribed 53.60 times.

The public issue was an offer for sale by promoters – Sanjay Agarwal, Jyoti Agarwal, Shakuntala Agarwal, Chiranji Lal Agarwal and MYS Holdings; and investors – Redwood Investment, International Finance Corporation, Labh Investments, Ourea Holdings and Kedaara Capital Alternative Investment Fund.