Akme Fintrade IPO subscribed 5 times, GMP reached 38%, what should you subscribe

Akme Fintrade IPO :The IPO of non-banking financial company Akme Fintrade India Limited has been subscribed about 5.23 times till 11:15 am on the second day. The size of this IPO is Rs 132 crore and only fresh equity shares will be issued in it. The company has fixed the price band for its IPO from Rs 114 to Rs 120 per share. At the same time, the minimum lot size in this is 125 shares. The craze of IPO is also being seen in the gray market. Should you invest money in this IPO? Know what is the advice of the brokerage house in this regard.

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Subscribe for Listing Gains (Subscribe Akme Fintrade)

Brokerage house Arihant Capital has advised to subscribe for listing gains in the IPO of Akme Fintrade India Limited. The brokerage says that Acme Fintrade India Limited is a growing NBFC company with a strong presence in rural and semi-urban India. The company focuses on vehicle financing and lending to small businesses and SMEs. As of December 2023, the company’s business loan segment, which accounts for 76.08 per cent of the total loan book, has experienced a decline of 21.08 per cent from March 2023 levels. Gross non-performing assets in this segment have increased by 4.56 per cent. The brokerage expects this segment to perform better going forward. Post IPO, the issue is valued at a price-to-book value (P/BV) of 2.5x at the upper price band of Rs 120.

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‘Neutral’ rating on IPO

Brokerage house Swastika Investmart has given a ‘Neutral’ rating on the IPO. According to the brokerage, Acme Fintrade India is an NBFC focused on vehicle finance and lending to small businesses in rural and semi-urban areas. However, the company claims a strong presence in these underbanked areas and has recently demonstrated positive financial performance. Several factors need to be carefully considered by potential investors.

Subscribe for a long term

According to brokerage house Anand Rathi, Acme Fintrade India is a company with a well-established vehicle finance and small business lending business with a deep understanding of the targeted customers. At the upper price band after the issuance of equity shares, the company is valuing at a P/E of 27.64x, P/BV of 1.52x, with a market cap of Rs 512.1 crore. The return on net worth is 7.72%. The brokerage believes that the IPO is well valued and investors should subscribe for the long term.

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GMP reached 38% (Akme Fintrade GMP)

There is a craze in the grey market regarding the IPO of Akme Fintrade. The unlisted stock of the company is at a premium of Rs 45 in the grey market. This premium is 38 per cent in terms of the upper price band of Rs 120. In this sense, a share of Rs 120 can be listed at Rs 165. This IPO was open for subscription on June 19 and will close on June 21.

Subscribed 5.23 times so far (Akme Fintrade Subscription)

Akme Fintrade’s IPO has been subscribed 5.23 times so far. About 50 percent of it is reserved for qualified institutional buyers (QIB) and it has been filled 2 percent so far. 35 percent of the share is reserved for retail investors and it has been filled 7.27 times so far. 15 percent of the share is reserved for non-institutional investors (NIIs) and it has been filled 11.64 times so far. The share reserved for employees has been filled 83 percent so far.

About the Company

Acme Fintrade India Limited is a non-banking financial company (NBFC). The company has more than 20 years of experience in lending in rural and semi-urban areas. The company mainly operates in Rajasthan, Gujarat, Maharashtra and Madhya Pradesh. The company finances the purchase of new two-wheelers and three-wheelers such as scooters, bikes, auto rickshaws. The company has 12 branches and presence at 25 points, which includes physical and digital branches.