Five Star Business Finance IPO: Check GMP ahead of shares listing

As per market observers, Five Star Business Finance shares are commanding a premium (GMP) of minus 2 in the grey market today. The shares of the company are expected to list on the leading stock exchanges BSE and NSE next week on Monday, November 21, 2022.

The initial share sale was entirely an offer for sale (OFS) of shares to the tune of ₹1,960 crore by existing shareholders and promoter group entities. The price band for the issue was fixed in the range of ₹450 per share to ₹474 per share.

The non-banking financial company (NBFC) mobilised ₹588 crore from anchor investors ahead of its initial share sale. The firm decided to allocate 1.24 crore equity shares to anchor investors at ₹474 apiece.

SmallCap World Fund, Fidelity Investments, Capital Research, Malabar Investments, Government Pension Fund Global, Abu Dhabi Investment Authority, Norges Bank, Carmignac Gestion, White Oak, Bay Capital, Segantii, SBI Life Insurance, HDFC Mutual Fund (MF), Baroda BNP MF, Edelweiss MF and Mirae MF are among the anchor investors.

Five Star Business Finance provides secured business loans to micro-entrepreneurs and self-employed individuals, the two segments of borrowers largely excluded by traditional financing institutions.

The NBFC commenced operations in 1984 with a focus on consumer loans and vehicle finance. It changed its business approach in 2005 towards small business loan lending in urban, semi-urban markets and rural areas with growth potential. Asset Under Management (AUM) increased to ₹5,100 crore as of March 31, 2022, as compared to ₹4,400 crore a year earlier.

The company has network of 311 branches, as of June 30, 2022, 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. The company is headquartered in Chennai, Tamil Nadu with a strong presence in south India.