Shares of Five Star Business Finance listed at a discount to IPO price on NSE and BSE amid weak domestic market. The share debuted at Rs 468.8, 1.1% under its issue price of Rs 474. The scrip touched a low of Rs 448.2 before recouping its losses. A muted listing was expected as ahead of the market debut, Five Star Business Finance shares were trading at a discount in the grey market. The public issue had only been 0.7x subscribed, as the company failed to catch the attention of investors. However, the QIB section had been subscribed 1.77x.
“The company’s muted listing can be attributed to unexciting investor subscription levels, high competition, and rising interest rates, which are big threats. Some of its peers are available at a better price in the secondary market; those who applied for listing gains can keep a stop loss of Rs. 460 in place,” said Parth Nyati, Founder, Tradingo.
The company sought to raise Rs 1,960 crore through its listing, with the price band per share between Rs 450 to Rs 474. The GMP of the share was currently lower than its upper level of the price band. Five Star Business Finance is a non-banking financial company that provides small businesses and mortgage loans to individuals or MSMEs, with a dominating focus in South India. The company currently boasts of over 300 branches across the country, over 4000 employees and a portfolio of Rs 5,296 crore. The company posted at Rs 451 crore profit last year, up from Rs 359 crore last year.