Ujjivan Small Finance Bank Launches QIP, Share Price Hits A 52-week High

Ujjivan Small Finance Bank launched a Qualified Institutional Placement (QIP). After that its shares rose 2% to hit a 52-week high in BSE intraday trade.

Tuesday’s BSE intraday trade saw a 2% increase in Ujjivan Small Finance Bank shares, bringing them to a 52-week high. The bank had initiated its QIP (Qualified Institutional Placement) on Monday.

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Early on Tuesday, BSE intraday session saw a 2.1% increase in the share price of Ujjivan SFP to Rs 25.85. 

The price of Ujjivan SFP stock has increased dramatically over the last three months as a result of the stock producing a return of over 55% during this time. As of September 13, the stock had increased by almost 25% over the previous month amid QIP news.

QIP Details Of Ujjivan Small Finance Bank

Prior to merging with its parent business, Ujjivan SFP released the QIP with a base price of ₹ 21.93 per share in order to comply with regulatory requirements.

In order to meet the legal requirements for merging with its parent company Ujjivan Financial Services, the lender had announced in February of this year that it planned to raise up to Rs 600 crore by offering shares to qualified institutional buyers.

Ujjivan SFB reported in a regulatory filing that the board’s merger and placement committee approved resolutions approving the launch of the issue on Monday and approving the issue’s base price of ₹ 21.93 per equity share at its meeting on September 12, 2022.

The term “floor price” refers to the lowest price in a share issuance scheme.

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Statement of Ujjivan Small Finance Bank

The Merger & Placement Committee of the board will meet on 15th September, 2022, according to Ujjivan SFB, to discuss and authorize the issue price, along with any discount.

In October 2021, the boards of directors, shareholders, and creditors of the bank as well as its promoter Ujjivan Financial Services Ltd (USFL) approved an amalgamation plan.

The bank has already asked Sebi for approval of a merger plan to meet the minimum public shareholding requirement (MPS).

According to Ujjivan SFB, its board looked at several options for achieving the MPS by reducing USFL’s stake in the bank from its current 83.32 percent to 75 percent or less.

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RBI Guidelines For All Small Finance Banks

According to RBI regulations for small finance banks, the promoter must cut their ownership position in the subsidiary to 40% within 5 years of the SFB starting operations. Operations at Ujjivan Small Finance Bank began in February 2017.