The initial public offer (IPO) of Jana Small Finance Bank was subscribed 88% on Wednesday, the first day of the bidding process. The NII portion of the issue was booked the most at 1.2 times, followed by retail investors at 1.19 times. The QIB (Qualified Institutional Buyers) category was subscribed just 14%. The IPO comprises fresh equity worth Rs 462 crore and an offer for sale (OFS) of 26.08 lakh shares. The IPO price band is set at Rs 393-414 per share. The issue will close on February 9. About 50% of the issue is reserved for qualified institutional buyers, 15% for non-institutional bidders, and 35% for retail investors.

Analysts have recommended investors to subscribe to the IPO as the company’s strengths, such as its wide distribution network, integrated risk management approach, and digitized operations. The IPO is priced at a P/BV (Price to Book Value) of 1.50x with a market cap of Rs 4,330 crore post issue of equity shares and a return on net worth of 14.40%. The company’s shares are fetching a premium of Rs 80 in the unlisted market.

Jana Small Finance Bank is the fourth largest small finance bank in terms of Asset Under Management (AUM). It has 771 banking outlets, including 278 banking outlets in unbanked rural centers. The company has marquee investors including TPG, HarbourVest Group, Amansa Capital, Morgan Stanley, and Hero Ventures. The bank’s operations are digitized and majority services are available online to customers with an integrated risk and governance framework. The small banking lender’s gross advances increased from Rs 11,838 crore in FY21 to Rs 18,001 crore in FY23, representing a Compound Annual Growth Rate (CAGR) of 23.31%. It further increased to Rs 21,347 crore as of September 2023. The total income for the period ended September 2023 increased by 31% to Rs 2,215 crore, while profit more than doubled to Rs 213 crore. Axis Capital, ICICI Securities, and SBI Capital Markets are the book running lead managers to the issue.