Five Star Business Finance lists at 5% discount in line with grey market expectations

Five Star Business Finance lists at 5% discount in line with grey market expectations
  • Shares of Five Star Business Finance listed at ₹449.9 against the allotment price of ₹450 per share.
  • The IPO received poor demand from investors amidst volatile market conditions, as only 70% of the issue was subscribed.
  • The market capitalisation of the company stood at ₹13,110 crore.
Shares of NBFC Five Star Business Finance listed at ₹449.95 on Monday, as against the issue price of ₹450 per share. The stock listed at a 5% discount over the allotment price.

Sensex fell by 463 points, and Nifty declined 129 points, tracking weak cues from the Asian markets, as investors fret over rising Covid-19 cases in China.

The market capitalization of the company stood at ₹13,110 crore, according to BSE.

Five Star Business Finance’s listing however is in line with the grey market’s expectations. It had predicted a discounted listing, after the issue failed to receive a full subscription from investors. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

The IPO received poor demand from investors amidst volatile market conditions as they were not fully subscribed. The issue was subscribed just 0.70 times.


The qualified institutional buyer portion was subscribed 1.77 times. The portion reserved for non-institutional investors witnessed a subscription of 0.61 times. Retail portion saw poor demand as it had a subscription of just 0.11 times.

The Chennai-based lender, which provides loans to micro-entrepreneurs, had planned to raise ₹1,960 crore but was subscribed only 70% on the last day. The company will not receive any funds raised from the IPO as all the shares are being sold by promoters.

This year, 26 IPOs made their stock market debut on the BSE mainboard. Most of them gave positive listing gains, except seven issues. Here are the top five IPOs with highest listing gains in 2022.
Companies Highest listing gains per share
Harsha Engineers International ₹155.9
Dreamfolks Services₹136.65
Aether Industries ₹134.75
DCX Systems ₹101.80
Syrma SGS Technology₹93.05
Source: BSE

The company’s finances

Tamil Nadu, Karnataka, Andhra Pradesh and Telangana account for 85% of its overall portfolio. The company plans to deepen its presence in existing geographies through increasing the number of field officers and setting up new branches.

The NBFC’s total income grew 19.5% from a year earlier to ₹1,254 crore in FY22, while its net profit grew 26.5% to ₹453 crore.

The non-banking lender’s total borrowings have fallen to ₹2,558 crore in FY22 from ₹3,425 crore in FY21.
Particulars Total revenue from operations Net profit
FY22₹1,254 crore ₹453 crore
FY21₹1,049 crore ₹358 crore
FY20₹786 crore ₹261 crore

Some of the peer companies of Five Star Business Finance are AU Small Finance Bank, Aavas Financiers, and Aptus Value Housing Finance India. It also competes with unlisted companies like Lendingkart Technologies and Digikredit Finance.

Peer companies Total Income in FY22% returns in 2022
Five-Star Business Finance ₹1,254 crore -
Aavas Financiers₹1,305 crore -26%
Aptus Value Housing Finance India₹840 crore -8%
Au Small Finance Bank₹6,915 crore 15%
(Source: Red Herring Prospectus)

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