Five-Star Business up 3.4% on debut as Rs 684 cr worth of shares are traded

Listing day gains come despite lukewarm response to IPO

Shares of Five Star Business Finance gained more than 3 per cent during their stock market debut on Friday. Shares of the micro finance firm finished at Rs 490, up Rs 16, or 3.4 per cent, over its issue price of Rs 474 per share. The stock hit a high of Rs 544 and a low of Rs 448 on the NSE, where Rs 684 crore worth of shares changed hands. Five Star Business’ listing day gains come despite a lukewarm response to its IPO. The company’s Rs 1,960-crore IPO managed to get bids for just Rs 1,593 crore. As a result, the company cut its IPO size to reach the minimum subscription threshold.

While the response to its IPO was poor, the list of its anchor investors was impressive. Some of them include SmallCap World Fund, Fidelity Investments, Capital Research, Malabar Investments, Government Pension Fund Global, Abu Dhabi Investment Authority and Norges Bank.

At the last close, Five Star Business had a market cap of Rs 14,275 crore, around 3.8 times its book value.

“Five Star Business has a fastest gross term loan among peers with a strong on-ground collections infrastructure leading to their ability to maintain a robust asset quality and access to diversified and cost effective long term financing with an experienced, cycle tested leadership supported by marquee investors,” Anand Rathi had said in a note recommending investors to subscribe with a long-term horizon.