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19 September, 2017 20:53 IST
'Subscribe' to AU Small Finance Bank IPO: Angel Broking
Source: IRIS | 28 Jun, 2017, 08.32AM
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AU Small Finance Bank (AUSFB) was one of the ten NBFCs which had obtained approvals from RBI for setting up a small finance bank (SFB). As a NBFC, it has a history of successfully serving the low & middle income individuals and businesses having limited or no access to the formal banking and finance systems.
 
Angel Broking has recommended 'Subscribe' to IPO of AU Small Finance Bank. Commenting on the investment rationale, the stock broker said, ''At the upper price band of Rs 358 the issue is offered at 5.1x its FY2017 BV. However, AU has reported a strong 48% PAT CAGR over FY2013-17, and we believe it has the potential to deliver 30% PAT CAGR over FY2017-19, and based on our quick estimates on FY2019 BV, the issue is offered at 3.5x. While the issue is offered at premium valuations, we believe the valuation is justified given the historical track record and strong growth potential the SFB offers. Hence, we recommend Subscribe to the issue.''

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