New Delhi: Fusion Micro Finance met the expectations of traders. Affinity Micro Finance Ltd. 324.80-43.20 (-11.74%) TOP INSIGHT Today’s stock price touched a new 52-week low. to view more close Tuesday’s Dalal Street debut of NSE -11.74% was subdued.
The young microfinance player’s stock was listed at a discount of 2% to its issue price of Rs 368 per share, at Rs 359.50 on the National Stock Exchange (NSE) and at Rs 360.50 on the BSE.
The loss for investors increased to more than 7% as the scrip fell another 5% to Rs 341.10, aggravating the pain in the counter.
According to analysts, only high-risk investors should hold the stock in the short- to medium-term, while everyone else should book their losses and sell.
“The company’s margins are still on the decline, and the category of borrowers it caters to poses a risk. Concerns for the business could also arise from an increase in NPAs “Added he. “Applicants for listing gains may continue to hold a stop loss of Rs. 340.”
Fusion Micro Finance’s initial public offering (IPO) was open for subscription from November 2 to 4, during which the company sold its shares for between Rs 350 and Rs 368 each in order to raise Rs 1,104 crore through an initial stake sale.
The issue was subscribed 2.95 times overall, with an 8.6 times subscription for the quota for qualified institutional bidders and a 1.38 times subscription for the HNI portion. Only 51% of the retail investor portion was subscribed.
The grey market was indicating a quiet listing, according to Manoj Dalmia, Founder & Director at Proficient Equities, and the issue did not receive a lot of interest during the bidding.
He continued, “Investors who applied for the shares only to profit from the listing can book at the listing price, while others can hold for a mid-to-long-term.
Fusion Micro Finance, a 1994 corporation, specializes in offering financial services to women business owners who come from economically and socially disadvantaged areas of society.
It has a network of 966 branches, 9,262 permanent employees, and 2.90 million active borrowers spread across 377 districts, 19 states, and union territories.
Investors should invest in other pre-listed financial players or lenders, according to Ravi Singhal, CEO of GCL Securities. Investors should exit at listing, he suggested.
Prior to Fusion Micro Finance’s listing today, CRISIL’s Ratings upgraded its long-term rating on its bank facilities and non-convertible debentures to “CRISIL A/Stable” from “CRISIL A-/Stable.”
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