Five Star Business Finance IPO Subscribed 70% On Closing Day
The IPO was subscribed 70% as of 7 p.m. on Nov. 11
Small business lender Five Star Business Finance Ltd. launched its initial public offering on Wednesday to raise up to Rs 1,960 crore.
The IPO was subscribed 0.32 or 32% on day 2. The bidding was led by Institutional investors.
The issue is a complete offer for sale, with a handful of the company's early shareholders looking to sell their holdings.
The Chennai-headquartered lender deals in secured business loans to micro-entrepreneurs and self-employed individuals, each of whom are largely excluded by traditional financing institutions. As of June 30, loans to small business owners and self-employed borrowers accounted for 70.15% of gross term loans.
Borrowers earning more than Rs 25,000 per month accounted for just 0.58% of the total loans at the end of the first quarter, according to data available in the red herring prospectus.
IPO open: Nov. 9.
IPO close: Nov. 11.
Price band: Rs 450-474 per share.
Fresh Issue: Not applicable.
Offer for sale: Rs 1,960 crore.
Selling shareholders: SCI Investments (Rs 166 crore), Matrix Partners (Rs 840 crore), Norwest Ventures (Rs 361.4 crore), TPG Asia (Rs 700 crore).
Book running lead managers: ICICI Securities, Edelweiss Financial, Kotak Mahindra Capital, Nomura Financial Advisory.
Subscription Status: Day 3
The IPO was subscribed 0.7 times, or 70%, as of 7 p.m. on Nov. 11.
Institutional investors: 1.77 times
Non-institutional investors: 0.61 times
Retail investors: 0.11 times