FedFina Stock, Trading Below IPO Price, Receives ‘Buy’ Ratings from 3 Brokerages with Potential Upside of up to 47%
FedFina, currently priced at ₹125, is down almost 11% from its IPO price. Despite a weak debut, brokerages rate it a ‘buy,’ citing its diverse product portfolio and strong parentage.
In March, the stock recovered by 5%, following three months of losses. The IPO, valued at ₹1,092.26 crore, was subscribed 2.24 times, with an issue price range of ₹133-140. It consists of a fresh equity issue of ₹600 crore and an offer-for-sale of 35,161,723 equity shares.
FedFina reported a 27.8% YoY rise in net profit for Oct-Dec 2023, reaching ₹65.4 crore. The company’s gross non-performing assets (NPA) declined to 2.19%, with net NPA at 1.66%.
Brokerages’ Recommendations:
- ICICI Securities: Target price of ₹184, indicating over 47% potential upside. Recognizes FedFina’s impressive growth rate and diverse product offerings, particularly tailored to the MSME segment.
- JM Financials: Target price of ₹160, implying a 28% upside potential. Highlights FedFina’s focus on secured asset classes, strong returns, and low competition.
- Equirus Securities: Target price of ₹160, with a 28% upside. Acknowledges FedFina’s robust parentage, diverse secured portfolio, and predicts a 29-30% AUM CAGR.
Despite trading below IPO price, these ratings suggest confidence in FedFina’s growth potential and sustained profitability.
