Five Star Business Finance IPO lists at small discount but closes higher

Five Star Business Finance Ltd had a tepid listing on 21st November 2022, listing at a marginal discount of -1.1%, but managed to close the day above the IPO price. Obviously, the closing price was also higher than the listing price for the stock. While the stock did huge bouts of volatility during the day, it closed more than 3% above the issue price on the first day of trading on the NSE. However, the stock did venture below the listing price several times on the first day of trading on the NSE. With undersubscription at just 0.70X overall and QIB subscription at 1.77X, the listing was expected to be weak, at the very least. Here is the Five Star Business Finance Ltd listing story on 21st November 2022.

The IPO price was fixed at the upper end of the band at Rs.4.74. Now that is rather surprising considering that the issue was just subscribed 70% in terms of overall subscription and 1.77X subscription for the QIB portion. The price band for the IPO was Rs.450 to Rs.474. On 21st November 2022, the stock of Five Star Business Finance Ltd listed on the NSE at a price of Rs.468.80, a marginal discount of -1.1% below the issue price of Rs.474. On the BSE also, the stock listed at Rs.449.95 a discount of 5.07% below the issue price.

On the NSE, Five Star Business Finance Ltd closed on 21st November 2022 at a price of Rs.489.95. That is a first day closing premium of 3.36% on the issue price of Rs474. However, the stock closed at a smarter premium of 4.51% on the listing price of Rs468.80. On the BSE, the stock closed at Rs.489.50. That represents a first day closing premium of 3.27% over the issue price but a much smarter premium of 8.79% over the listing price on the stock exchange. On both the exchanges, the stock listed below the IPO issue price but closed Day-1 above the listing price. The markets may have been disappointed by the response to the IPO but markets must have also been gratified by the fact that the company reduces its IPO size accordingly and only took in lower capital. That worked favourably for sentiments.

On Day-1 of listing, Five Star Business Finance Ltd touched a high of Rs.543.60 on the NSE and a low of Rs.448.20; a rather volatile move on the first day. The stock oscillated between a discount and a premium with the tempo sustaining through the day. In fact, if you look at the range of prices, the stock went below the issue price and also above several times through the day. However, the pressure on the stock is visible from the fact that the close was nearer to the low point of the day than to the high point. On Day-1 of listing, the Five Star Business Finance Ltd stock traded a total of 139.33 lakh shares on NSE amounting to value of Rs.684.28 crore on the first day. The order book during the day showed a lot of selling pressure at higher levels with the sell orders exceeding the buy orders. However, it is positive that the stock managed to close the first day at a premium, albeit marginal..

On the BSE on Day-1 of listing, Five Star Business Finance Ltd touched a high of Rs.539.90 and a low price of Rs.448.20. The stock oscillated between premium and discount to the issue price through the day before closing with strength. In fact, like on the NSE, even on the BSE, if you look at the range of prices, the stock had a huge range of volatility but the good news is that the stock closed at a premium, although it was just about marginal. On Day-1 of listing, the Five Star Business Finance Ltd stock traded a total of 6.40 lakh shares on the BSE amounting to value of Rs.32.43 crore on the first day. While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed selling pressure at higher levels with the sell orders exceeding the buy orders consistently in certain pockets of time. That made it a highly volatile stock on the day of listing, albeit the close was positive.

At the close of Day-1 of listing, Five Star Business Finance Ltd had a market capitalization of Rs.14,262.37 crore with free-float market cap of Rs.1,426.24 crore.