Five Star Business Finance raises ₹588 crore from anchor investors ahead of IPO. Latest GMP

Non-banking financial company Five Star Business Finance Ltd on Monday said it has mobilised ₹588 crore from anchor investors ahead of its initial public offering (IPO) that will open for public subscription on Wednesday. NBFC The ₹1,960 crore issue will open on November 9 till Friday, November 11. The price band for the issue is fixed at ₹450 per share to ₹474 per share.

The firm has decided to allocate 1.24 crore equity shares to anchor investors at ₹474 apiece, aggregating the transaction size to ₹588 crore, according to a circular uploaded on BSE's 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 anchor investors.

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

As per market observers, Five Star Business Finance shares are commanding a premium (GMP) of ₹11 in the grey market today. The shares of the company are expected to list on the leading stock exchanges BSE and NSE on Monday, November 21, 2022.

Five Star Business Finance provides secured business loans to micro-entrepreneurs and self-employed individuals, the two segments of borrowers largely excluded by traditional financing institutions.

The NBFC commenced operations in 1984 with a focus on consumer loans and vehicle finance. It changed its business approach in 2005 towards small business loan lending in urban, semi-urban markets and rural areas with growth potential. Asset Under Management (AUM) increased to ₹5,100 crore as of March 31, 2022, as compared to ₹4,400 crore a year earlier.

ICICI Securities, Kotak Mahindra Capital Company, Edelweiss Financial Services and Nomura Financial Advisory and Securities (India) Private Limited are the book-running lead managers to the issue. KFin Technologies Limited is the registrar of the IPO.