Five Star Business Finance IPO: What GMP reflects ahead of listing date

Five Star Business Finance IPO: After finalisation of share allotment process, bidders are eagerly waiting for Five Star Business Finance IPO listing date, which most likely on Monday next week. Notice in this regard can come any time in this regard and hence those who applied for the public issue are busy scanning information in regard to expected listing premium from the public issue. Meanwhile, grey market signals may not go down well among the public issue subscribers. According to market observers, shares of Five Star Business Finance Ltd have disappeared from the grey market after trading in discount for few days. They said that grey market is giving weak signals in regard to the public issue.

Five Star Business Finance IPO GMP

Market observers said that Five Star Business Finance IPO grey market premium (GMP) today is not available as the stock has been out of trade for last few days. They said that Five Star Business Finance share price was available at a discounted price earlier. So, grey market has remained bearish in regard to the public issue since closure of its subscription on 11th November 2022. 

They said that shares not being available in grey market means ‘muted to negative’ listing. The public issue reced dull response from investors as well. After three days of bidding, the public issue failed to get fully subscribed, which is enough to understand the mood of investors in regard to the NBFC. The public issue got subscribed 0.70 times in three days of bidding while its retail portion was subscribed 0.11 times only.

On reasons for tepid response to the IPO by investors and grey market, market observers said that the NBFC provides secured business loans to microentrepreneurs and self-employed individuals. The company has its headquarters in Chennai, Tamil Nadu, with a strong presence in south India. Among the compared peers, it has the fastest gross term loan growth and a consistent track record of financial growth with increasing revenue and profit. However, high competition and rising interest rates are big threats to this. Finally, some of its peers are available at a better price in the secondary market. so, all these things are playing among the market players and these things are trickling through grey market today and it may trickle in same manner on the listing date as well.

However, stock market experts maintained that GMP is not an ideal indicator about listing premium as it is a non-regulated speculative number, which has nothing to do with balance sheet of the company. They said that one should rely on the financials of the company as it gives concrete fundamental picture of the company’s business and its growth outlook. They advised allottees to stick with their conviction that prompted them to invest in this public issue.

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