Below is the Quote on Equitas Small Finance Bank Ltd By Mr. Jaikishan Parmar- Sr. Equity Research Analyst, Angel Broking Ltd
Market outlook and valuation: At the upper end of the price band, Equitas SFB demands Adj. PB of 1.26x post considering fresh issue. Though the bank has a diversified loan book and the best CASA ratio among SFBs, the return ratios are subdued with GNPA above 2.5% for last 3 years. Our concern for Equitas SFB is fresh formation of bad loans from moratorium book that would keep provisions high and return ratios compressed. We believe investors should wait for price discovery before making any investment decision. Considering the above factors, we recommend a NEUTRAL rating for the IPO.
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