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AU Small Finance Bank made the third-biggest debut of this year on Monday with the stock listing at a premium of 48 per cent (₹530) and closing at ₹531.5 (up 48.5 per cent) compared to the issue price of ₹358 on the NSE.
The bank mopped up ₹1,912 crore via the IPO and was subscribed 53.6 times. AU Small Finance Bank’s issue is the third this year that received overwhelming response; the other two were Avenue Supermarts and Central Depository Services.
However, the stock may face some resistance going ahead or even decline as the listing performance has been higher than expected, said analysts. IIFL Institutional Equities has initiated its coverage on the company with an “add” recommendation but with a lower target price of ₹450. It recommends to buy the stock on declines.
There have been five good debuts (returns of at least 20 per cent to more than doubling on listing) in 2017, compared to three (gains of 20-39 per cent on listing day) between January to July 10 in 2016.
Strong debut by AU SFB had a rub-off effect on other newly-listed companies (including three listed in 2016) on Monday.
Tepid debuts of 2017 also got a leg up. Tejas Networks, which saw a muted debut on June 27, touched a new 52-week high and has gained 43 per cent now since listing. Similarly GTPL Hathway, which closed with 1 per cent gain on debut on July 4, has gained 8 per cent now.
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