InvestorQ : Can you tell me about the final allotment status of Five Star Business Finance IPO? Did the issue get undersubscribed?
Crowny Pinto made post

Can you tell me about the final allotment status of Five Star Business Finance IPO? Did the issue get undersubscribed?

3 weeks ago

The IPO of Five Star Business Finance consisted entirely of an offer for sale or OFS of Rs1,960 crore. It saw extremely tepid response on Day-1 and Day-2 of the IPO and closed with an undersubscription at the end of Day-3. As of close of 11th November 2022, out of a total of 304.89 lakh shares on offer, Five Star Business Finance got bids for a mere 212.04 lakh shares. This implies an overall subscription of just 0.70X or 70% of the issue is what got eventually subscribed. Only the QIB investors gave more than the allotted subscription while the HNI / NII segment fell short and the retail segment could just about manage 11%.

Let us first talk about the QIB portion. Ahead of the IPO, there was an anchor placement of 1,25,05,094 shares at the upper price band of Rs.474 done to 21 anchor investors worth Rs.588 crore. Big anchors included Fidelity, Volrado, Abu Dhabi Investment Authority, Norwegian Pension Fund, Carmignac Portfolio etc. The QIB portion net of the anchor had a quota of 87.11 lakh shares and against that it got bids for 154.46 lakh shares at the close of Day-3. That translates into subscription ratio of 1.77X for QIBs. These bids are typically bunched on the last day but it remained tepid overall.

Let us now turn to the HNI portion of the IPO. The HNI portion subscription was absolutely tepid as it got subscribed just 0.61 times. The IPO got applications for 40.12 lakh shares against the quota of 65.33 lakh shares on offer. Even the last day rush of funded applications and corporate applications was totally missing in this case as there was lack of interest. Out of the HNI quota, the above Rs10 lakh bid category (B-HNIs) got subscribed 0.78 times while the below Rs10 lakh bid category (S-HNIs) got subscribed just about 0.28 times. This break up is only for information purposes in the overall HNI scenario.

Finally, we come to the retail portion, which got a rather tepid and pathetic subscription of just about 0.11X or 11% at the close of Day-3. You can almost say that there was nil retail appetite for the IPO. the retail allocation was 35% in this IPO. To be more specific, out of the 152.44 lakh shares on offer available to retail in the IPO, valid bids were received for only 17.46 lakh shares, which is about 11%. Out of these retail bids, it included bids for 14.90 lakh shares at the cut-off price. The IPO priced in the band of Rs.450 to Rs.474 has closed for subscription as of the close of Friday, 11th November 2022. Overall, it has fallen short.