The Rs2,275-crore initial public offer (IPO) was subscribed 128.84 times.
Mumbai: Shares of MAS Financial Services Ltd made a strong market debut on Wednesday. The Gujarat-based non-banking financial company (NBFC) was listed on the stock exchanges at Rs660, up 43.7% from its issue price of Rs459 per share.
The Rs2,275-crore initial public offer (IPO), which was open from 6-10 October with a price band of Rs456-459 per share, was subscribed 128.84 times.
The issue had raised Rs135.91 crore from anchor investors, including Nomura, JP Morgan, Wasatch HDFC Mutual Fund (MF), ICICI Prudential MF, SBI MF, Birla Sun Life MF, DSP Blackrock MF and Reliance MF.
Ahead of the share sale, analysts had said valuations of the NBFC which lends to middle and lower income segments are reasonable. “At the upper band of the issue, the company trades is offered at 3.6 times post issue book value of Rs130 which is fairly priced in our view compared to peers,” said Prabhudas Lilladher Pvt. Ltd.
According to the brokerage firm, MAS Financial Services has been able to display best-in-class return ratios with return on assets (ROAs) of 3% and return on equity (ROE) of over 25% consistently in the last few years and is much better than immediate peers which operate in the same segment. “It is likely to continue to deliver on profitability and maintain superior return ratios,” it said.
The company’s assets under management (AUM) have grown at a healthy 33.4% compounded annual growth rate (CAGR) over FY2013-17 with strong asset quality.
As of Q4FY17 and Q1FY18, the company’s AUM was Rs3,332.6 crore and Rs3,451.7 crore, respectively. AUM increased at a CAGR of 33.4% from Rs1,053.2 crore as of FY13 to Rs3,332.6 crore as of FY17. As of 30 June, it had more than 500,000 active loan accounts across more than 3,165 customer locations.
Proceeds from the fresh issue will be used towards augmenting its capital base to meet future capital requirements.
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