CreditAccess’ IPO comprises fresh equity issuance worth Rs 6.3 billion, and a secondary share sale worth Rs 5 billion. At the top-end of the price band, CreditAccess will have market capitalisation of Rs 60.5 billion after the issue. The microfinance firm focuses on providing micro loans to women in rural areas.
For the year ended 2017-18, CreditAccess had reported net profit of Rs 1.25 billion on revenues of Rs 87.5 billion.
The IPO is priced at nearly three times its 2017-18 book value (post-issue basis) and nearly 35 times its 2017-18 earnings. The IPO closes on Friday.
“The near term looks great for Grameen, thanks to huge capital infusion and strong growth. However, the long term needs hard thinking — demonetisation has illustrated that even well-run MFIs can lose 5-10 per cent of assets in crisis,” said a note by Antique Stock Broking, which has an ‘avoid’ rating on the IPO.
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