The Rs582 crore IPO of Suryoday Small Finance Bank, which opened on Wednesday, was subscribed 0.58 times as of 10:50 am on Day 1. The price band has been set at Rs303-305 apiece and the issue will close on March 19. At the upper end of the issue, the IPO will fetch Rs582 crore. Ahead of the IPO, Suryoday Small Finance Bank had raised Rs170 crore from anchor investors including Axis Mutual Fund, IDFC Mutual Fund and Goldman Sachs.

Here are 10 things to know about Suryoday Small Finance Bank IPO:

1) According to grey-market trackers, Suryoday Small Finance Bank shares are quoting at a premium between Rs27 and Rs30.

2) KFin Technologies Private Limited is the registrar of the IPO. According to brokerages, the share allocation in Suryoday Small Finance Bank IPO is likely to be finalized on March 24 and listing may happen on March 30.

3) "Suryoday is amongst the leading small savings bank in India in terms of NIMs, RoA, yields and deposit growth and cost-to-income ratio with good quality management. However, COVID19 pandemic has disrupted this sector so next 2-3 quarters will be crucial to look for recovery," says says Abhay Doshi, who is the founder of UnlistedArena.com, which deals in pre-IPO and unlisted shares.

4) Suryoday Small Finance Bank IPO comprises fresh issuance of 81,50,000 equity shares and an offer for sale of up to 1,09,43,070 equity scrips by existing shareholders.

5) The bank has proposed to utilise the net proceeds from the fresh issue towards augmenting its capital base to meet future capital requirements.

6) As of March 2020, the net worth of the bank stood at around Rs1,000 crore with a capital adequacy ratio of 30%. It has a deposit base of more than Rs2,800 crore and a gross loan portfolio of around Rs3,700 crore.

7) Axis Capital, ICICI Securities, SBI Capital Markets and IIFL Securities are the merchant bankers of the issue.

8) "At the upper end of the IPO price band, it is offered at 2.7 times P/BV and 5.8 times 9MFY21 EPS, with a market cap of Rs. 3,237 crores. On comparative basis, the company is placed at a little bit higher valuation as compared to its peers. However it is expected that the company is going to get benefited from the overall growth in demand of commercial vehicle loans and affordable housing finance which results in improvement in overall return ratios," domestic brokerage Anand Rathi said in a note.

9) "Additionally, we also expect operating parameter to improve further at a healthy rate owing to improvement in NIM, asset quality. Hence considering the differentiated business model and with the current financials, we recommend a "Subscribe (Long Term)" rating to this IPO," it added.

10) Religare Broking in a note said: "Over the years, Suryoday Small Finance Bank has been able to diversify its product portfolio into segments such as commercial vehicles, home loans and other loans but its large chuck still depends on microfinance business (MFI) (70%). Further, in Covid times, large exposure to MFI business deteriorated the bank’s assets quality. However it is expected to get normalized once collections efficiency improves. Also, SSFB has made temporary provisions to mitigate the risk. Besides, in terms of region business presence, major business (75-80% of revenue) comes from three states such as Maharashtra, Tamil Nadu and Odisha and these states were severely impacted by the pandemic. Though collections and deposits are improving, there are customer segments and businesses, which are still impacted and expected to recover gradually."

"We feel the bank would continue to face challenges in the near term however its medium to long term outlook remains bright. Going ahead, the bank focus remains on growing secured portfolio in non-MFI such as commercial vehicles and housing loans, also expanding distribution channel as well as increase geographical presence will remain their top priorities. On the valuation front, the company is valued at 2.4x P/BV, 9MFY21. Investors can Subscribe for the long term."