August 19, 2019 03:54 PM
The IPO (Initial Public Offer) of a subsidiary of a company usually increases the share value of the company. However, Ujjivan Finance fell 8% in Monday August 19th on Intraday (by 10.00 am). Ujjivan Small Finance Bank, a subsidiary of the company, Draft Papers registered at SEBI for 1,200 crore IPO. Analysts said the IPO would be negative for current shareholders in Ujjivan Finance. Due to this IPO, they will be limited to shares in the holding company. Moreover, the holding company’s stock is trading at a discount of 20-80%, resulting in a reduction in the price fixed for Ujjivan Small Finance Bank’s share. Shares of Ujjivan Finance traded down 7.88 per cent at Rs 261.70 on Monday morning. The reverse merger (going to Ujjivan Finance and meeting with Ujjivan Bank) is currently unclear and requires RBI approval. Ujjivan Financial Services can trade with discounts of 60% or more. As a result, the company’s rating was downgraded and the company’s stock target price for September 2020 was Rs. 375 to Rs. The brokerage said the 200 reduced number. At 3.13 pm, Ujjivan Finance lost 1.14% to Rs. Trading at 280.75. The stock closed at Rs. 260.00 starting at Rs. The intraday high at 281.20 was Rs. Intraday hit a low of 260.00.
Ujjivan Small Finance Bank prepares for Initial Public Offer (IPO). Through the IPO, the bank is planning to approach a total of Rs 1,200 crore. The IPO had submitted the draft documents to the market regulator SEBI on August 16 for the approval. Kotak Mahindra Capital Bank, IIFL Securities and JM Financial have been appointed as Book Running Lead Managers for the IPO. The bank said in a statement to SEBI that the price range will soon be decided by the Book Running Leading Managers. The bank said it would issue equity shares worth Rs 120 crore to eligible Ujjivan Financial Shareholders. The company is coming to the IPO with the aim of reaping the benefits of listing on the stock market, improving brand image and liquidity for existing shareholders.