The ₹807.85-crore initial public offering (IPO) of the lender was priced in the range of ₹500-525 a piece early this month. The issue was subscribed 2.86 times.
The IPO consisted of the fresh issue of 15.8 million shares. The Thoothukudi-based private lender allotted 71,28,000 equity shares to 10 anchor investors ahead of the IPO, raising ₹363.53 crore at ₹510 apiece.
Analysts said investors could consider exiting the stock at this juncture.
“The precarious legal challenges, the lack of complete clarity on the management’s long-term performance, and less than stellar subscription numbers are some of the reasons for its negative listing,” said Santosh Meenahead of research at
, “Those who applied for listing gains can maintain a stop loss of ₹470. Long-term investors should wait for some quarters to let the dust settle. In the meantime, we suggest investors go for the existing listed banks where the management’s track record and performance during multiple credit cycles are visible.”
Most analysts said the IPO valuations were attractive compared to peers, but the bank’s prospects would be subject to pending legal issues. Some of them had a subscribe rating on the issue with a long-term view. The proceeds of the public issue will be utilized for augmenting the bank’s tier-I capital base to meet future capital requirements.