Five Star Business Finance IPO: What GMP reflects as issue to open soon

Five Star Business Finance IPO: The initial public offering (IPO) of Five Star Business Finance Ltd is going to hit primary markets on Wednesday. The three days bidding of the public issue would begin on 9th November 2022 and it will remain open for subscription till 11th November 2022. Though this public offer, the NBFC aims to raise 1,960.01 crore, which is 100 per cent offer for sale (OFS) in nature. Meanwhile, ahead of subscription opening date, shares of Five Star Business Finance have made their debut in grey market as well.

Five Star Business Finance IPO GMP today

According to market observers, Five Star Business Finance IPO grey market premium (GMP) today is 9. It should be noted that Five Star Business Finance shares were not available for trade in grey market till last Friday. This means the stock has made its debut in grey market today. They said that the public issue is available at par with its price band of 450 to 474 per equity share. However, there can be some spike in the grey market premium of the IPO once it opens for subscription on Wednesday this week. They went on to add that much will depend on the kind of response it gets from the investors and how the secondary market mood remain during three days of subscription of the IPO.

What this GMP means?

Market observers went on to add that Five Star Business Finance IPO GMP today is 9 that means grey market is expecting that the public issue would list around 483 ( 474 + 9), which is at par with its price band of 450 to 474 per equity share. However, they maintained that more clarity would come after the opening of subscription and the kind of response it receives from investors.

However, stock market experts advised investors to stick with the basics and go with fundamentals of the company. They said that GMP has no connection with company’s balance sheet and hence it is a non-regulated artificial number, which should not be relied heavily by investors. They said that it’s balance sheet of the company that signals actual fundamentals of the company and one should rely on this instead of grey market premium.

Five Star Business Finance IPO details

The public issue is priced at a price band of 450 to 474 per equity share. It will open for subscription on 9th November and it will remain open for bidding till 11 November 2022. The PO is proposed for listing on both BSE and NSE and it is likely to list on 21st November 2022.

Five Star Business Finance IPO other details

Five star Business Finance competes with Shriram City Union Finance Limited, Vistaar Financial Services Private Limited, Veritas Financial and Management Services Private Limited, Aye Finance, Lendingkart Technologies Private Limited, Digikredit Finance Pvt Ltd and AU Small Finance Bank, Aavas Financiers Limited, Home First Finance Company India and Aptus Value Housing Finance India.

The NBFC posted a 19.49% growth in total income at 1256.16 crore in FY22 from 1051.25 crore in FY21, while its net profit stood at 453.54 crore in FY22 from 358.99 crore in FY21.

Total income increased by 12.74% to 339.05 crore for the three months ended June 30, 2022 from 300.75 crore for the three months ended June 30, 2021, primarily due to an increase in revenue from operations. Profit after tax increased by 37.28% to 139.43 crore for the three months ended June 30, 2022 from 101.57 crore for the three months ended June 30, 2021.

IIFL Securities Limited is the sole book running lead manager and Link Intime India Private Limited is the registrar to the issue.

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