KFin Technologies IPO subscribed only 2% during early hours of bidding

New Delhi: The Rs 1,500 crore initial public offering (IPO) of KFin Technologies received a dull response from investors during the first two hours of the bidding process on the first day.

The company is selling its shares in the range of Rs 347-366 apiece between December 19-21, with a lot size of 40 equity shares. The issue comprises entirely an offer for sale (OFS) of about 4.1 crore equity shares.

According to the data from BSE, the investors made bids for 4,85,240 equity shares or only two per cent compared to the 2,37,75,215 equity shares offered for the subscription by 12.00 noon on Monday, December 19.

The quota for retail bidders was booked eight per cent. The allocation for non-institutional investors and the portion for qualified institutional bidders was not even off the mark.

Brokerage firms have a mixed review on the issue. A few suggest it is as a long term player citing its strong position in the duopoly market, whereas others suggest to keep off the issue citing rich valuations and complete OFS status.

The company is going to list at a P/E of 36.90x with a marketcap of Rs 6,133 crore, while its peer CAMS is trading at a P/E of 39.20x, said Marwadi Financial Services. "It is available at reasonable valuations as compared to its peer."

The brokerage has assigned a subscribe rating to this IPO as the company has a diverse multi-asset servicing platform and is well-positioned to benefit from strong growth across large markets in India and South East Asia.

KFin Technologies has raised Rs 675 crore from anchor investors as the company allocated over 1.84 crore shares to 44 funds at Rs 366 apiece, according to a circular uploaded on BSE.

The company has reserved 75% shares for qualified institutional buyers (QIBs), whereas 15% shares will be allocated to non-institutional investors (NIIs). Retail bidders will get the remaining 10% of the shares.

The company’s financial results have been mixed. It reported a significant increase in revenue over the last 3 years and 6 months. Its declined in FY20, and it also incurred a loss in FY21, said 's IPO note.

"This issue is complete OFS and the company will not receive any proceeds from this IPO. Finally, the issue is fully priced and coming at a P/E valuation of 38.77," it added with an 'avoid' rating for the issue.

, Capital Company, JP Morgan India, and Jefferies India are the book running lead managers of the issue, whereas Bigshare Services has been appointed as the registrar to the issue.

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