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Usha Financial Services IPO: Things Smart Investors Need to Know Before Investing

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Overview of the Company
Usha Financial Services Limited (UFSL) is a non-banking financial company (NBFC) that provides lending solutions to other NBFCs, corporates, MSMEs, and individuals, with a special focus on women entrepreneurs and electric vehicle (EV) financing. Incorporated in 1995, the company has a diverse product portfolio that includes retail and wholesale lending. UFSL’s operations aim to empower small entrepreneurs and promote green financing initiatives.

Core Business and Market Position
UFSL has built a strong market position by strategically partnering with NBFCs and other business correspondents. The company’s diversified product offerings cater to the unique financial needs of MSMEs, corporates, and individual borrowers. With an assets under management (AUM) of ?30,695.76 lakhs and a net worth of ?10,602.63 lakhs as of September 2024, UFSL is well-positioned to leverage its experience and expand its reach through the upcoming IPO.

Usha Financial Services IPO Details and Objectives

IPO Details

Information

IPO Type

Book Building

Fresh Issue Size

58,60,000 Equity Shares

Face Value

?10 per share

Price Band

?160 to ?168 per share

Listing Platform

NSE SME

Total Issue Size

?98.45 Crores

Market Maker Portion

3,20,800 shares

Purpose of the IPO:
The proceeds from the IPO will be used to augment the capital base, invest in technology, and fund general corporate purposes. Additionally, the company aims to expand its lending portfolio and enhance operational efficiency.

Timeline of Usha Financial Services IPO

Event

Date

IPO Open Date

October 24, 2024

IPO Close Date

October 28, 2024

Basis of Allotment

October 29, 2024

Refund Initiation

October 30, 2024

Credit of Shares to Demat

October 30, 2024

Listing Date

October 31, 2024

Pricing and Lot Size of Usha Financial Services IPO

  • Price Band: ?160 - ?168 per share
  • Minimum Lot Size: 800 shares
  • Minimum Investment for Retail Investors: ?134,400
  • Minimum Investment for HNI (2 lots): ?268,800

How to Apply for the Usha Financial Services IPO?

  • Online Application Process with Bajaj Broking:
    • Log in to your Bajaj Broking Demat account and select the Usha Financial Services IPO.
    • Enter the number of shares you wish to apply for, within the price band.
    • Complete the application through the Application Supported by Blocked Amount (ASBA) method.
    • Confirm your details and apply.
    • Wait for the allotment status to be updated.

Financial Health and Performance

  • Key Financial Metrics:
    • Assets (as of June 30, 2024): ?35,133.66 lakhs
    • Revenue (FY 2024): ?6,396.05 lakhs
    • Profit After Tax (FY 2024): ?1,344.95 lakhs
    • Net Worth (as of June 30, 2024): ?11,106.79 lakhs
  • Recent Performance and Growth Prospects:
    • UFSL has demonstrated a 38% increase in revenue and a 32% rise in profit after tax between FY 2023 and FY 2024.
    • The company maintains a robust capital adequacy ratio of 33.03% and a debt-to-equity ratio of 1.71.

Investment Risks and Opportunities

  • Potential Risks of Investing in the IPO:
    • Volatility in the financial markets may impact stock performance.
    • The company operates in a highly competitive NBFC sector.
  • Opportunities and Growth Potential:
    • Growing demand for MSME financing and green financing (electric vehicles) offers a unique growth avenue.
    • Strategic partnerships with lenders, including banks and other NBFCs, help strengthen the company’s operational base.

Key Performance Indicator (KPI)

KPI

Value

Return on Equity (ROE)

9.29%

Return on Capital Employed (ROCE)

12.02%

Debt/Equity Ratio

1.7

P/E (Post IPO)

18.11

Price to Book Value (P/BV)

24

Usha Financial Services IPO Registrar

Registrar

Contact Information

Skyline Financial Services

D-153 A, 1st Floor, Okhla Industrial Area, New Delhi-110020

Telephone

+91-11-40450193-97

Email

compliances@skylinerta.com

Usha Financial Services IPO Lead Managers

Lead Manager

Contact Information

Narnolia Financial Services Ltd

201, 2nd Floor, Marble Arch, Kolkata-700020

Unistone Capital Private Limited

A/305, Dynasty Business Park, Andheri, Mumbai-400059

Thought Process of CEO on Usha Financial Services IPO

CEO Mr. Rajesh Gupta views this IPO as a steppingstone toward long-term growth for UFSL. By raising capital through this IPO, the company plans to expand its market reach, further innovate in green financing, and continue supporting MSMEs and women entrepreneurs.

Company Address of Usha Financial Services Ltd

Registered Office
330, Mezzanine Floor, Functional Industrial Estate, Patparganj, Delhi - 110092, India.

Conclusion

Usha Financial Services IPO offers an opportunity for investors to engage with a company that operates in a growing sector of the NBFC space. With its diversified product offerings and focus on innovative financial solutions, UFSL has positioned itself as a key player in the financial services market. Investors should carefully evaluate the risks and company fundamentals before making their investment decisions.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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Frequently Asked Questions

Who is the CEO of Usha Financial Services Ltd (UFSL)?

Answer Field

The CEO of Usha Financial Services Ltd is Mr. Rajesh Gupta.

When will the Usha Financial Services IPO open for subscription?

Answer Field

The IPO will open for subscription on October 24, 2024.

What is the Usha Financial Services IPO and why is it significant?

Answer Field

This IPO allows UFSL to raise capital for expanding its lending operations and explore new growth areas like EV financing.

What is the price band for the Usha Financial Services IPO, and how was it determined?

Answer Field

The price band for the IPO is set between ₹160 and ₹168 per share, based on the company’s financial metrics and market conditions.

What are the key risks and rewards of investing in the Usha Financial Services Ltd IPO?

Answer Field

Risks include market volatility and competition. Rewards include exposure to a growing sector with unique financing offerings.

When will the Usha Financial IPO shares be listed?

Answer Field

The shares will be listed on October 31, 2024.

What documents should I review before investing in the Usha Financial Services IPO?

Answer Field

Investors should review the Red Herring Prospectus and financial statements.

What is the lock-up period details for the Usha Financial Services Ltd IPO?

Answer Field

The lock-up period applies to 50% of shares for 30 days, and the remaining for 90 days.

Will Usha Financial IPO pay dividends?

Answer Field

The company has not yet declared a dividend policy; check the financial statements for more information​.

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