Spandana Sphoorty Financial Ltd made a weak debut on the stock exchanges on Monday with its shares listing at a 3.75% discount to its issue price before paring some losses.
Shares of the Hyderabad-based microlender began trading on the BSE at Rs 824 compared with its initial public offering price of Rs 856 apiece.
The stock oscillated between Rs 865 and Rs 690 on the first day of trade. It closed at Rs 848.40, down 0.9% from the issue price, giving the company a market value of 5,444.78 crore. Spandana had sought a market valuation of Rs 5,504.64 crore in the IPO.
The BSE’s benchmark Sensex closed 0.14% higher at 37,402.49 after advancing nearly 1% in afternoon trade.
The subdued listing follows an IPO that managed to sail through on the final day with the help of institutional investors as retail investors and high net-worth individuals stayed away.
Spandana Sphoorty, backed by homegrown private equity firm Kedaara Capital among others, is the 10th company to list on the main board of the stock exchanges this year. Five of the previous nine companies have made strong debuts while two tanked and two others ended flat after losing initial gains.
Venture capital firm Helion Venture Partners and strategic investor Valiant Mauritius Partners FDI Ltd are other institutional investors in Spandana.
The company raised Rs 400 crore by issuing fresh shares in the IPO, besides helping existing PE and venture capital shareholders partially exit their investments and raise about Rs 800 crore through a secondary market sale.
The shareholders sold a total of 9.35 million shares. The IPO saw a stake dilution of 21% on a post-issue basis. That's lower than the 27.71% stake dilution expected at the time the company filed for its IPO. Kedaara and other investors were previously hoping to raise an estimated Rs 1,125 crore by selling 13.15 million shares but trimmed their issue size later.
Axis Capital, ICICI Securities, IIFL Holdings, JM Financial, IndusInd Bank and Yes Securities are the merchant bankers who managed the IPO.