Last updated: 17 Mar, 2021 | 08:36 am
Suryoday Small Finance Bank is set to raise up to Rs 581 crore via IPO which opened on 17th March, Wednesday. Here are the details:
About Suryoday Small Finance Bank
At the higher end of the price band, Suryoday Small Finance Bank is aggressively priced at a P/E of around ~29.10 times FY20 EPS (on a post-issue fully diluted basis). Considering annualised 9MFY21 earnings, the P/E ratio comes to around 44.27 against the industry average of 25.15. Suryoday SFB has lower return ratios as compared to its listed peers.
On the positive front, the bank has posted robust growth in its topline and bottomline over the last three years and is confident of achieving good growth over the next few years.
However, investing in SFBs calls for a higher risk tolerance due to higher asset quality stress, concentration risk, and volatile profitability. Peers with better financial profiles (Equitas, Ujjivan) are available at cheaper valuations. Considering these factors, we remain ‘Neutral’ on the prospects of the issue.