The company is selling its shares in the range of Rs 450-474 apiece between November 9-11, with a lot size of 31 equity shares. The issue is completely an offer-for-sale (OFS).
According to the data from BSE, investors made bids for 7,21,742 equity shares on Day 1 of the IPO compared to 3,04,88,966 equity shares on offer
The quota for retail bidders was subscribed 0.03 times, whereas the allocation for non-institutional investors and qualified institutional bidders was not even off the mark.
Incorporated in 1984, Five Star Business Finance is a non-banking finance company (NBFC) which provides secured business loans to micro-entrepreneurs and self-employed individuals.
With more than Rs 3000 crore in assets under management (AUM), the Chennai-headquartered company has the fastest AUM growth among peers.
Brokerage firms remain mixed over the issue. Some have suggested subscribing to the issue while others find its valuations expensive. They also flagged the complete OFS nature of the issue as another area of concern.
Based on FY22 annualised earnings, the company is valued at 3.7x P/BV. FSBF enjoys a niche place among financiers in the southern regions, said
Securities in its IPO note.
“It has posted healthy profitability over the past couple of years. In view of strong growth outlook, extensive distributional network, healthy financials and an experienced management team, we recommend a subscribe rating to the issue,” it added.
The company is bringing the issue at P/B multiple of 3.84x on FY22 basis. It is among the select institutions to develop an underwriting model that evaluates the cash flows of small business owners and self-employed individuals, said Hem Securities.
“It has access to diversified and cost-effective long-term financing with a conservative approach to asset liability and liquidity management and experienced, cycle-tested leadership with an experienced longstanding promoter, and a professional management team,” it said while assigning a subscribe rating to the IPO.
Five Star Business Finance raised Rs 588 crore from 16 anchor investors ahead of its IPO. The NBFC said it allocated 12.4 million shares at Rs 474 apiece to anchor investors.
, , Capital Company and Nomura Financial Advisory and Securities are the managers to the issue, whereas KFin Technologies has been appointed as the registrar to the issue.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
