The initial public offering (IPO) of Laxmi India Finance opened for subscription on Tuesday, July 29. The shadow lender is offering its shares in the price band of ₹150-158 per share. Investors can apply for a minimum of 94 equity shares and in multiples thereafter. The IPO will close for bidding on Thursday, July 31.

Day 2 IPO Subscription

On Day 2 of the IPO, as of 10:15 am, the issue was subscribed 0.44 times, receiving bids for 49.22 lakh shares against 1.13 crore shares on offer. The retail investor portion was booked 0.72 times, while the non-institutional investor (NII) segment saw 0.23 times subscription. The qualified institutional buyer (QIB) category was bid 0.10 percent. Moreover, the employee quota was subscribed 0.46 times till now.earning

In the grey market, shares of Laxmi India Finance were trading at a grey market premium (GMP) of ₹8.25, implying no gain over the issue price. This indicates an estimated listing price of ₹166.25 per share, up 5.22 percent from IPO price.

Investors should note that GMP is merely indicative of unlisted market sentiment and is subject to rapid changes.

About the IPO

The company aims to raise a total of ₹254.26 crore through the IPO, comprising a fresh equity issue worth ₹165.17 crore and an offer-for-sale (OFS) of up to 56,38,620 equity shares amounting to ₹89.09 crore. The net proceeds from the fresh issue will be utilised for augmenting the company’s capital base to meet future capital requirements and for general corporate purposes.

Prior to the IPO opening, Laxmi India Finance mobilised ₹75.5 crore through its anchor book, allotting 47.79 lakh shares at ₹158 each. Anchor investors included Saint Capital Fund, BNP Paribas Financial Markets – ODI, Compact Structure Fund, Cognizant Capital Dynamic Opportunities Fund, India Max Investment Fund, Holani Venture Capital Fund-I, and Rajasthan Global Securities.

PL Capital Markets is acting as the book-running lead manager to the issue, while MUFG Intime India (Link Intime) is the registrar. Shares of the company are proposed to be listed on both the BSE and NSE, with listing scheduled for Tuesday, August 5.

About the firm

Incorporated in 1996, Laxmi India Finance is engaged in offering MSME loans, vehicle loans, construction finance, and other structured lending solutions, largely catering to small businesses and entrepreneurs. More than 80 percent of its MSME loans qualify as priority sector lending.

For the year ended March 31, 2025, Laxmi India Finance reported a net profit of ₹36.01 crore with revenue of ₹248.04 crore. In the previous financial year ended March 31, 2024, the company posted a net profit of ₹22.47 crore and revenue of ₹175.02 crore. It is projected to command a net profit of close to ₹825.83 crore.

Should you subscribe to the IPO? What brokerages say

Arihant said the company has shown strong financial performance and is among the fastest-growing players in terms of assets under management (AUM), reporting 32.83 percent YoY AUM growth in FY25. SBI Securities added that the company has maintained a low gross NPA of 1.07 percent and net NPA of 0.48 percent during the same period. The brokerage highlighted Laxmi India Finance’s diversified funding base, supported by 47 lenders, and a strong capital adequacy ratio of 20.80 percent. The issue is valued at a P/BV of 3.21x, based on FY25 BV/share of ₹49.26. It recommended subscribing to the IPO for the long term.

Swastika noted that the company’s core business revolves around lending to segments underserved by traditional banks. However, it pointed out that the business operates in a highly competitive environment. Based on the current financial metrics, the firm believes the IPO is fairly priced. Therefore, it advised investors to subscribe to the issue with caution.

SMIFS | Rating: Subscribe

SMIFS recommended subscribing to the issue based on the company’s consistent growth in AUM, profitability, and asset quality. It emphasized the importance of continued risk management as the company scales up. The firm also pointed to Laxmi India Finance’s strong management, securitised loan book, and opportunities from cross-selling and geographic expansion as reasons to consider the IPO a long-term investment opportunity.

Ventura Securities | Rating: Subscribe

Ventura noted that the company intends to expand its presence in existing and new geographies, enhance digital capabilities for underwriting and loan servicing, and diversify its lending portfolio by offering new-age financial products. The company is also looking to strengthen its SME financing arm and increase cross-selling of insurance and other financial offerings. Based on this strategy, Ventura recommended subscribing to the IPO.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.