The scrip, against all odds of low subscription and expensive valuations, listed at a marginal discount of 1% at Rs 468.8 on the National Stock Exchange (NSE) and a 5% discount at Rs 449.95 on BSE,
compared to the issue price of Rs 474.
However, following the tepid listing, the scrip zoomed 20% from the listing price to hit an intraday high of Rs 539.90 during its debut session, pleasantly surprising the investors.
Though the majority of analysts are not very bullish on the counter in the near term and suggest exiting the stock after a better-than-expected profit for the bidder.
Arafat Saiyed, Senior Research Analyst,
Securities, said Five Star has pulled off a strong surprise and that investors should put the profits off the table after this debut.
Incorporated in 1984, Five Star Business Finance is a non-banking finance company (NBFC) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
Nyati, Founder, Tradingo, said that the company’s muted listing could be attributed to unexciting investor subscription levels, high competition, and rising interest rates, which are big threats.
“Some of its peers are available at a better price in the secondary market, and those who applied for listing gains can keep a stop loss of Rs 460 in place,” he added. The company’s Rs 1,960 crore IPO was sold in the range of Rs 450-474 per share and received a muted response from investors.
Allocation reserved for non-institutional investors (NIIs) and retailers was subscribed to 61% and merely 11%, respectively. The quota reserved for qualified institutional buyers (QIBs) was subscribed 1.77 times.
Ravi Singhal, CEO, GCL Securities, also suggests allottees exit on the rise and look at other stocks that are better placed in the current market scenario.
“For those who missed getting Five Star Business Finance during allotment are also advised to avoid taking any position as the stock is still highly priced against its peers,” he added.
The company has an extensive network of 311 branches, spread across eight states and one union territory, and about 150 districts across India, with Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka being key states.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Education News Click Here
For the latest news and updates, follow us on Google News.
