Fusion Micro Finance Ltd. IPO
Fusion Micro Finance Ltd.
IPO Listing Details
Listed On
BSE & NSE
Listed On
Issue Price
₹368
Issue Price
Listing Price
₹361
Listing Price
Listing Gains
-₹7.50 (-2.04%)
Listing Gains
IPO Details
Bidding Dates
02 Nov - 04 Nov '22
Bidding Dates
Min. Investment
₹14,000
Min. Investment
Lot Size
40.00
Lot Size
Price Range
₹350 - ₹368
Price Range
Issue Size
1,050 Cr
Issue Size
Subscription Rate
- Retail Individual Investor0.51x
- Non-Institutional Investor1.38x
- Qualified Institutional Buyers8.59x
- Employees
About Company
The initial public offering (IPO) of Fusion Micro Finance Ltd (FML) opens for public subscription on November 2. Fusion Micro Finance is engaged in providing financial services to unserved and underserved sections of society.
FML is one of the youngest companies among the top NBFC-MFIs in India in terms of AUM. It has achieved a significant footprint across India and has extended reach to 2.90 million active borrowers served through its network of 966 branches and 9,262 permanent employees spread across 377 districts in 19 states and union territories in India as of June 30, 2022.
The company's business runs on a joint liability group-lending model, wherein a small number of women form a group (typically comprising five to seven members) and guarantee one another's loans.
As of June 30, 2022, and March 31, 2022, 2021 and 2020, total AUM stood at Rs 7,389 crore, Rs 6,785.9 crore, Rs 4,637.8 crore and Rs 3,606.5 crore, respectively.
Fusion Micro Finance IPO opens on November 2 and closes on November 4. The company has fixed the price band for the issue at Rs 350-368 per share.
The company plans to raise Rs 1,104 crore through the IPO, which comprises a fresh issue of shares worth Rs 600 crore and an offer-for-sale (OFS) of 1.36 crore shares by the promoters and investors.
Promoters Devesh Sachdev, Mini Sachdev, Honey Rose Investment, and Creation Investments Fusion LLC will sell 35.5 lakh equity shares via the OFS. Investors Oikocredit Ecumenical Development Cooperative Society U A, and Global Impact Funds SCA SICAR will offload 66.06 lakh shares and 35.39 lakh shares via the OFS, respectively.
The company plans to utilise the proceeds from the fresh issue to strengthen its capital adequacy position. The OFS money will go to the selling shareholders
Important Dates - Fusion Micro Finance IPO
| Application opens on | 2nd November 2022 |
| Last date of application | 4th November 2022 |
| Date of Allotment | 11th Novemberber 2022 |
| Refund begins from | 14th Novembber 2022 |
| Credit of shares to Demat | 15th November 2022 |
| Listing date | 16th November 2022 |
Why should you invest in Fusion Micro Finance Ltd. IPO?
Fusion Micro Finance is a strong player in the fast-growing MFI sector. The company has posted strong revenue growth with a CAGR of 31% and healthy advances growth at a CAGR of 33% over 2 years period. With strong tailwinds in the banking sector and an uptick in the credit cycle, Fusion Micro Finance is poised to see decent growth in the upcoming years.
Financial Snapshot -Fusion Micro Finance IPO
Fusion Micro Finance has reported strong topline growth but declining profits due to the pandemic and expansion spending from FY20 to FY22. Check out its financial performance over the recent years.
| Financial Year | Total Assets | Total Revenues | Net Profit |
|---|---|---|---|
| March 2020 | Rs 4,239.99 crore | Rs 730.31 crore | Rs 69.61 crore |
| March 2021 | Rs 5,837.93 crore | Rs 873.09 crore | Rs 43.94 crore |
| March 2022 | Rs 7,290.48 crore | Rs 1,201.35 crore | Rs 21.76 crore |
Fusion Micro Finance Ltd IPO Noteworthy Highlights
Here are some of the key details and information about Fusion Micro Finance IPO before investing:
- Fusion Micro Finance’s active borrowers grew at a CAGR of 33.6% to 29 lakh as of June 2022. It had the sixth-lowest gross NPA ratio among the top 10 NBFC-MFIs in India during FY22.
- Fusion Micro Finance’s IPO lot size is 40 shares, and a retail-individual investor can apply for up to 13 lots, making the total investment of 520 shares or Rs 191,360.
- The book-running lead managers (BRLM) to the issue are ICICI Securities, CLSA India, IIFL Securities and JM Financial.
- The company has reserved half of the offer for qualified institutional buyers (QIBs), 15% for non-institutional investors, and the balance 35% for retail investors.
Fusion Micro Finance Ltd. IPO - SWOT Analysis
Strengths
Fusion Micro Finance has achieved significant success with its growth strategy of targeting underserved and underpenetrated rural areas in both existing markets and new geographies. It has a well-diversified and extensive pan-India presence with a technologically advanced operating model. The company is well-positioned to capitalize on industry tailwinds.
Weaknesses
The company’s large portion of collections and disbursements from customers are in cash, exposing it to operational risks. It has also posted declining profits from FY20 to FY22 due to the pandemic and expansion spending.
Opportunities
NBFC-MFIs are expected to grow at a much faster rate of 20-22% as compared to the MFI industry at 18-20% CAGR between FY22-25. The new regulatory regime for microfinance loans levels the playing field and benefits NBFC-MFIs. This would increase the market opportunity available to MFIs and enable them to create a more balanced portfolio.
Threats
Any downturn in the economy can impact GNPA/NNPA ratios. Any disruption in sources of funding or increase in costs of funding could adversely affect the liquidity and financial condition of the company. Fusion Micro Finance also faces the most significant organised competition from other MFIs, banks and state-sponsored social programs in India.
Fusion Micro Finance IPO Grey Market Premium
| Date | GMP |
|---|---|
| 2nd November | Rs.40 |
| 1st November | Rs.35 |
How to apply for Fusion Micro Finance Ltd. IPO?
You can apply for the Fusion Micro Finance Ltd. IPO in these ways:
UPI
Link your personal bank A/C to a trusted UPI ID and map it with your TradeSmart account. Now, proceed further to book your IPO. On acceptance of the mandate, the bid amount will get blocked in your bank account Learn more.
Demat Account
1. If you are an Existing TradeSmart demat account holder and wish to apply for an Fusion Micro Finance Ltd. click here.
2. If you don't have a TradeSmart Account? Sign up.
