Five Star Business Finance raises ₹588 crore from lead investors ahead of IPO. Latest GMPs

Non-banking financial firm Five Star Business Finance Ltd said on Monday it had stepped up 588 crore from primary investors ahead of its initial public offering (IPO) which will open for public subscription on Wednesday. NBFC The The 1,960 crore issue will open from November 9 to Friday, November 11. The price range for the issue is set at 450 per share at 474 per share.

The company has decided to allocate 1.24 crore shares of capital to anchor investors to 474 each, aggregating the transaction size to 588 crore, according to a circular uploaded on the ESB website.

SmallCap World Fund, Fidelity Investments, Capital Research, Malabar Investments, Government Pension Fund Global, Abu Dhabi Investment Authority, Norges Bank, Carmignac Gestion, White Oak, Bay Capital, Segantii, SBI Life Insurance, HDFC Mutual Fund (MF), Baroda BNP MF, Edelweiss MF and Mirae MF are among the main investors.

The initial sale of the shares is entirely an offer of sale (OFS) of shares in the amount of 1,960 crore by existing shareholders and promoter group entities. The Chennai-based NBFC is backed by investors including TPG, Matrix Partners, Norwest Ventures, Sequoia and KKR.

According to market watchers, shares of Five Star Business Finance command a premium (GMP) of 11 on the gray market today. The company’s shares are expected to list on the major BSE and NSE stock exchanges on Monday, November 21, 2022.

Five Star Business Financing offers guaranteed business loans to micro-entrepreneurs and the self-employed, the two borrower segments largely excluded by traditional financing institutions.

NBFC began operations in 1984 with a focus on consumer lending and auto finance. In 2005, it shifted its business approach to lending to small businesses in urban, semi-urban markets and rural areas with growth potential. Assets under management (AUM) increased to 5,100 crores as of March 31, 2022, compared to 4,400 crores a year earlier.

ICICI Securities, Kotak Mahindra Capital Company, Edelweiss Financial Services and Nomura Financial Advisory and Securities (India) Private Limited are lead managers for the issuance. KFin Technologies Limited is the Registrar of the Initial Public Offering.

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