Five Star Business Finance shares finish listing day at 3% premium over issue price after a muted debut

Five Star Business Finance — a Chennai-based financier — made a weak debut in the secondary market on Monday, as its shares debuted on BSE at Rs 450 apiece, a discount of 5.1 percent to the upper end of its IPO price range. On NSE, the stock is listed at Rs 468.8 apiece — a discount of 1.1 percent. The listing was in line with investors' response to its IPO, which concluded earlier this month with an overall booking of 70 percent.

The stock finished the listing day at Rs 489.5 apiece on BSE and Rs 490 apiece on NSE — a premium of around three percent.

The IPO, to raise up to Rs 1,960 crore, received bids for 2.1 crore shares as against the three crore shares on offer, according to exchange data. The public offer comprised an offer for sale (OFS) by existing shareholders — meaning the company would not get any proceeds from the issue.

Five Star Business Finance's debut was also in line with the trend in the grey market — or an unofficial market for unlisted securities — since its IPO.

Five Star Business Finance's growth has slowed down to 15 percent post-COVID from pre-COVID expansion of 90-95 percent, its CMD, Lakshmipathy Deenadayalan, said in an interview to CNBC-TV18.

The company is adding 60-70 branches annually as against 40-50 pre-COVID, he said "Today we are adding close to 60-70 branches. So the ticket size, branch opening and more sourcing officers for Five Star will take its growth 2x better than the industry."

The company added 70 branches in the last 12 months, he said.

The IPO of Five Star Business Finance was open for subscription for from November 9 to November 11. Potential investors could bid for Five Star Business Finance shares in a price band of Rs 450-474 apiece in multiples of 31 under the IPO — which translates to Rs 13,950-14,694 per lot.

Analysts had generally positive views on the public offer.