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Five Star Business Finance made a rather dramatic debut at the exchanges today as the stock had listed below the offer price but was caught in a tussle between the bulls and bears.
Five Star Business Finance Limited is an NBFC-ND-SI that is registered with the RBI. Its main function is to provide secured business loans to micro-entrepreneurs and self-employed individuals.
The Chennai-based company has a strong presence in South India with over 300 branches all over India spread across eight states and one union territory and approximately 150 districts across India, with Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka being the key states.
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Before the company floated its IPO, the company invited several veteran investors to subscribe to its anchor book. As a result, the company raised Rs 588 crores from 21 anchor investors which included Smallcap World Fund Inc, American Funds, Fidelity Funds, Volrado Venture, Abu Dhabi Investment Authority, Government Pension Fund Global, Carmignac Portfolio, and Segantii India Mauritius.
The interest in the issue was fairly muted as the total issue was subscribed only 0.7x times i.e. an under subscription. QIBs were the only participants to actually subscribe over their reserved portion. NIIs and RIIs failed to subscribe to the entirety of their portions as the issue seemed particularly unappealing.
The GMP of the stock was negative early on today. They were trading at a discount of Rs 2 per share as analysts had expected a muted debut, similar to that of Tamilnad Mercantile Bank.
At 9:45, the shares were listed at a discount of over 1% at the bourses as they opened at Rs 468.80 per share. The stock was expected to decline further as it hit a low of Rs 448.20 per share.
However, the stock saw a turning point as it breached the Rs 500 mark by 11:00. But sellers overtook the scrip once again as it ultimately closed at Rs 490 per share, up 3.9%.
The initial investment of Rs 14,694 (31 shares x Rs 474 per share) grew to Rs 15,190 (31 shares x Rs 490 per share) after today's volatile session.
People who failed to get allotment are suggested to not enter into fresh trades while those who have received allotment are being advised by analysts to hold for now.
Article by Aman Agarwal.
This news piece is brought to you in association with jobaaj.com
