Usha Financial Services IPO Listing Today

Usha Financial Services Limited, established in May 1995 and specializing in providing lending solutions to NBFCs, corporates, MSMEs, and individual clients with a particular focus on women entrepreneurs, made a lukewarm debut on the Indian stock market on Thursday, 31st October 2024, with its shares listing on the NSE SME platform. The company, with an AUM of ₹306.96 crore and a net worth of ₹106.03 crore, also ventures into EV financing.

Listing Details

• Listing Price: Usha Financial Services shares were listed at ₹164 per share at market open on NSE SME, marking a tepid start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a discount to the IPO issue price. Usha Financial had set its IPO price band from ₹160 to ₹168 per share, with the final issue price being fixed at the upper end of ₹168.
• Percentage Change: The listing price of ₹164 on NSE SME translates to a discount of 2.4% over the issue price of ₹168.
   

First-Day Trading Performance

• Opening vs. Latest Price: Following its weak opening, by 10:18:46 AM IST, the stock was trading at ₹155.80, down 5% from its previous closing price and hitting the lower circuit.
• Market Capitalisation: As of 10:18:46 AM IST, the company's market capitalisation stood at ₹338.67 crore.
• Trading Volume: The traded volume was 11.27 lakh shares with a traded value of ₹18.31 crore, with 100% deliverable quantity.

Market Sentiment and Analysis

• Market Reaction: After a tepid opening, the stock hit the lower circuit during early trading.
• Subscription Rate: The IPO was oversubscribed by 19.37 times (as of October 28, 2024, 6:20:00 PM), with NIIs leading at 28.55 times subscription, followed by retail investors at 20.76 times, and QIBs at 10.04 times.
• Trading Range: As of 10:18:46 AM IST, the stock hit a high of ₹168 and a low of ₹155.80 during early trading.

Growth Drivers and Challenges

Expected drivers of future performance:

• Focus on women entrepreneurs
• Strategic partnerships with NBFCs
• Expansion into EV financing
• Strong CRAR of 33.03%
• Extensive customer due diligence procedures

Potential challenges:

• High debt-to-equity ratio of 1.70
• Aggressive pricing concerns
• Competitive NBFC sector
• Interest rate sensitivity
• Regulatory changes risk

Utilisation of IPO Proceeds

Usha Financial plans to use the funds for:

• Augmenting the company's capital base
• General corporate purposes

Financial Performance

Usha Financial has shown significant growth:

• Revenue increased by 38% to ₹63.96 crore in FY2024 from ₹46.19 crore in FY2023
• Profit After Tax rose by 32% to ₹13.45 crore in FY2024 from ₹10.17 crore in FY2023
• H1 FY2025 showed revenue of ₹26.81 crore with PAT of ₹5.04 crore

As Usha Financial Services begins its journey as a listed entity, market participants will closely monitor its ability to maintain growth momentum and manage its leverage. The weak listing and subsequent decline suggest cautious market sentiment despite the company's recent financial performance and focus on niche lending segments.