Fedfina, a company catering to the micro, small and medium enterprise (MSME) sector, experienced a volatile start on its first day of trading on the National Stock Exchange (NSE) today. The stock opened at ₹138 (₹1 = $0.012), slightly below its issue price of ₹140, but gained momentum to hit an intraday high of ₹148.25. By the trading day's end, the shares had stabilized around ₹143.50, with substantial activity that saw over 30m shares change hands.
The initial public offering (IPO) of Fedfina, which took place from November 22-24, was met with keen interest from Qualified Institutional Buyers (QIBs), who subscribed 3.51 times the shares available to them, contributing to an overall subscription rate of 2.2 times. The IPO comprised both new equity issues and an offer for sale (OFS) by Federal Bank and True North Fund VI LLP, raising a total of ₹1,092 crore (₹1 crore = $119918.70).
Analysts had previously cautioned investors about the potential for short-term losses in Fedfina's stock, a sentiment echoed by SMC Global Securities. Concerns were raised about the operational challenges that Fedfina faces, including asset-liability mismatches and a regional concentration in its operations, which could pose liquidity and profitability risks for the company.
Fedfina's business model specializes in providing various loan products, such as gold loans and loans against property.
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