Gránit Bank's IPO listing was a success

Gránit Bank has successfully registered its shares, as announced by the bank on the Budapest Stock Exchange. This transaction is being celebrated as a significant achievement, setting the stage for what comes next on the market.

Author

Andrew Davison
December 13, 2024

The critical question remains: will investor interest sustain once the shares start trading on the stock exchange? Moreover, can a rapidly growing bank, traditionally serving corporate clients but also implementing digital solutions, convince investors to evaluate it as a dynamic digital bank, rather than a conventional one? The market evaluation indicates the bank's shares might be viewed as nearly twice as valuable compared to industry leader OTP’s shares.

Subscription Details

Between November 26 and December 11, 2024, Gránit Bank aimed to sell shares worth between 7 and 30 billion HUF. Due to high interest, it successfully raised 17.7 billion HUF. Each new share is priced at 14,500 HUF, which is closer to the upper end of the initially specified range. Public interest exceeded expectations, with individual investors receiving 791,097 shares and institutional investors receiving 429,723 shares. This balanced distribution is essential to maintain demand during the upcoming market trading.

As emphasized in their press release, supporting secondary market trading is crucial, and ensuring a sufficient level of unmet demand is a priority.

Market Outlook

The press release reflects the bank’s optimism, highlighting this IPO as one of the largest in Hungary and on the Budapest Stock Exchange. Gránit Bank's recent rapid growth and lasting accolades make it an attractive option for prospective investors. Additionally, stability in the political landscape could lead to state-supported projects, making Gránit a preferred banking partner for state-owned enterprises.

However, some may find the high share price concerning, as it values the bank at nearly double its book value—much higher than the typical price-to-book ratio for conventional banks, which is around 1 to 1.2.

Market opinions will further clarify if the bank can be appraised with the same high multiples as neobanks and fintechs, or if it will be categorized alongside traditional banks given its largely corporate client base. Stock market performance will provide answers as trading begins after December 23.

For more information, visit Telex.