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Fusion Micro Finance marked its presence at the bourses today as the stock made a disappointing debut.
Fusion Micro Finance Ltd. is one of India's youngest members of the top 10 NBFC-MFIs in India in terms of AUM. Incorporated in 1994, the company provides financial services to women entrepreneurs who belong to women entrepreneurs belonging to the unbanked & economically and socially deprived sections of society.
The company has a strong presence across India as it has a network of over 900 branches and 9,000+ employees across 377 districts in 19 states and union territories in India with 2.9 million active borrowers.
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The IPO, which opened in the first week of November, saw a fair amount of participation, especially from the QIBs. The QIB portion, which was 50% of the issue, was subscribed 8.6x times while the NII and RII segments saw muted interest as it was subscribed 1.38x and 0.51x times respectively. All in all, the IPO was fully subscribed 2.95x times.
Institutions showed a healthy interest in the company as it managed to raise around Rs 331 crores from anchor investors. Nomura, BNP Paribas Arbitrage, Aditya Birla Sun Life Mutual Fund, ICICI Prudential Mutual Fund, Edelweiss Mutual Fund, Motilal Oswal Mutual Fund, HDFC Life Insurance Company, Bajaj Allianz Life Insurance Company, Kotak Mahindra Life Insurance Company were among the anchor investors.
The shares of the Rs 1,100 crore IPO, which were offered at a price of Rs 368 per share, were showing muted signs as the stock was trading at a discount in the grey market. Early signs today indicated a flat or discounted debut.
The stock was listed at 9:45 today at a premium of 2.3%. It opened at Rs 359.50 per share as selling pressure drove the stock down. The stock touched a low of Rs 321.10 per share before closing marginally higher at Rs 324.80 per share, down over 11% today.
The initial investment of Rs 14,720 (40 shares x Rs 368 per share) declined to Rs 12,992 (40 shares x Rs 324.80 per share) after today's disappointing debut.
Analysts have a mute outlook for the stock in the medium and long term where investors aiming for listing gains are advised to exit at the issue price while others are suggested to maintain for the mid or long term.
Article by Aman Agarwal
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