This Nomura, Morgan Stanley-backed newly listed stock hits new high, scrip up 25% in month

Fusion Micro Finance share price: A month after its listing, Fusion Micro Finance share price zoomed nearly 25 per cent on the exchanges. The stock on Wednesday touched a new life high of Rs 415 per share levels on the BSE and NSE each, after gaining over 6 per cent intraday.

Fusion Micro Finance had made a tepid stock market debut at Rs 360 apiece levels, a discount of over 2 per cent as compared to its issue price of Rs 368 per share at the upper end on November 15, 2022.

The company’s muted listing was attributed to unexciting investor subscription levels, high valuation, and the Offer For Sale (OFS) nature of the issue, Pravesh Gour, Senior Technical Analyst, Swastika Investmart said in his comment on Fusion Micro Finance.

Also Read: Fusion Microfinance shares tank over 12% in debut trade

After a dull listing, the stock has maintained a bully rally on continuous session eventually to breach Rs 400 per share levels for the first time today. In the last five sessions, the counter gained over 3.5 per cent on the NSE as compared to a nearly 0.5 per cent rise in the Nfity50 index.

Fusion Microfinance is among the top 10 non-bank finance companies (NBFC) in the micro-finance (MFIs) segment in India. It offers loans to women entrepreneurs and its business runs on a joint liability group-lending model, wherein a small number of women form a group and guarantee one another’s loans.

The company demands a price-book (P/B) multiple of 1.8 on a post-IPO basis, whereas its peers like CreditAccess command a P/B of 3.3, the analyst Gour said, while advising the investors, who participated in the public offer and after listing, to maintain a stop loss of Rs 340 per share on the scrip.

Also Read: Fusion Micro Finance IPO review by Anil Singhvi: Subscribe or avoid? Check recommendation here

The Rs 1,104-crore initial public offer (IPO) of Fusion Micro Finance was launched between November 2-4, 2022. The initial share-sale was subscribed 2.95 times with a price range of Rs 350-368 a share.

The company is backed by prominent domestic mutual fund houses such as Aditya Birla Sun Life Asset Management Company and Nippon Life India Asset Management Company. Similarly, global investment banking firms such as Nomura and Morgan Stanley have also invested in Fusion Micro Finance.