Jana Small Finance Bank share price falls over 7% after weak listing; What should investors do?

Jana Small Finance Bank share price extended losses after making a weak debut on the Indian stock market Wednesday. 

Jana Small Finance Bank shares were listed at ₹396 apiece on the BSE, a discount of 4.35% to the issue price of ₹414 per share. On NSE also, the stock began trading with a discount of 4.35% at ₹396 apiece.

However, soon after the listing, Jana Small Finance Bank shares succumbed to selling pressure and declined over 7% from listing price.

Jana Small Finance Bank share price declined to a low of ₹366.20 apiece on the BSE, down 7.52% from its listing price and down 11.54% from its IPO price.

Read here: Jana Small Finance Bank share price lists with over 4% discount at ₹396 apiece on BSE

Jana Small Finance Bank’s disappointing debut came as a surprise for many analysts as they believe the negative listing performance paints a less promising picture than initially anticipated.

“This negative performance falls significantly short of pre-listing expectations and raises concerns about investor confidence in the bank's future prospects. Regulatory constraints, borrower creditworthiness, and dependence on unsecured loans remain persistent concerns. Also, broader market volatility and economic headwinds could dampen investor sentiment,” said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

While the bank’s long-term potential remains, the current outlook warrants a cautious approach, Nyati added.

Jana Small Finance Bank raised ₹570 crore from the recently concluded initial public offer (IPO) which comprised a fresh issue of 1.12 crore equity shares aggregating to ₹462 crore and an offer for sale (OFS) of 26.08 lakh shares aggregating to ₹108 crore.

The bidding for Jana Small Finance Bank IPO opened on February 7 and closed on February 9. The IPO price band was ₹393 to ₹414 per equity share.

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Ahead of the IPO, Jana Small Finance Bank had raised ₹166.95 crore from anchor investors. The company had allotted 40.32 lakh equity shares to 17 anchor investors on February 6.

Jana Small Finance Bank IPO had received strong response from investors across the categories. It was subscribed 18.50 times in total. 

The company proposes to utilise the net proceeds from the fresh issue towards augmenting the bank’s Tier-I capital base to meet the bank’s future capital requirements and general corporate purposes.

Axis Capital, ICICI Securities and SBI Capital Markets are the book running lead managers of the Jana SFB IPO, while Kfin Technologies is the IPO registrar.

At 2:45 pm, Jana Small Finance Bank share price were trading at ₹376.90 apiece on the BSE, lower by 4.82% from its listing price and down 8.96% from its IPO price.

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