Image Source : Trade Brains
Shares of Laxmi India Finance, a non-banking financial company based in Rajasthan, began trading on the BSE at Rs 136 on August 5, marking a 14% discount to the IPO issue price of Rs 158. The stock also opened weakly on the NSE at Rs 137.52, down nearly 13%, disappointing initial investors and coming in well below what the grey market had indicated before listing.
Key Highlights from the Listing
The weak debut contrasts with the modest grey market premium of 2% seen just before listing, indicating lower-than-expected investor enthusiasm on Day 1.
The IPO price band was Rs 150-158 per share. The total IPO size stood at Rs 254.26 crore, including a fresh issue of 1.04 crore shares worth Rs 165.17 crore and an offer-for-sale of 56.38 lakh shares contributing Rs 89.09 crore.
The issue saw a fair response, with overall subscription at 1.86 times. Retail investor demand was stronger (2.22 times), while non-institutional investors and QIBs bid 1.84 and 1.30 times, respectively.
The company raised Rs 75.51 crore from 11 anchor investors a day before the IPO opened.
About Laxmi India Finance
Incorporated in 1996, Laxmi India Finance focuses on lending to MSMEs and offers vehicle and construction loans. Its branch network is largest in Rajasthan, but it also operates in Gujarat, Madhya Pradesh, Chhattisgarh, and Uttar Pradesh.
Laxmi India serves over 35,000 customers through 158 branches, with MSME loans making up over 76% of its Rs 1,277 crore assets under management as of March 2025.
The company’s net worth rose from Rs 152 crore in FY23 to Rs 257 crore in FY25, and revenues climbed from Rs 129.5 crore to Rs 245.7 crore in the same span. Net profit for FY25 was reported at Rs 36 crore.
According to its Red Herring Prospectus, capital raised from the IPO will be used to expand its lending business and for general corporate purposes; Rs 177 crore is earmarked specifically to shore up its capital base.
What Prompted the Discounted Listing?
Analysts note that the tepid listing reflects concerns about Laxmi India’s regional focus, a generally cautious market environment, and moderate subscription levels during the IPO.
Opinions on the stock are divided. Some see promise in its efficient hub-and-spoke model, technology-driven sourcing, and high share of first-time MSME borrowers; others flag risks related to asset quality and relatively high leverage.
While the debut was subdued, the company’s financials show strong growth in recent years and it maintains a capital adequacy ratio above regulatory norms.
Looking Ahead
The opening price did see some recovery in early trade, with shares crossing Rs 142.
Investors and the company’s management will watch closely to see if broader market conditions and the company’s fundamental strengths can attract more positive momentum in the coming weeks.
Source: CNBC TV18, Business Standard, Economic Times, Moneycontrol, listing and IPO disclosures, August 5, 2025
Advertisement
Advertisement
