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Shares of Five Star Business Finance Ltd will be listed today. The company has fixed the IPO price at ₹474, at the upper end of the price band of ₹450-474, despite the issue was under-subscribed.
In fact, IPO of Five Star Business Finance Ltd sailed through only after the selling shareholders agreed to reduce their offer size. The offer was subscribed by 81 per cent only, as retail investors and non-institutions remained lukewarm. However, the quota for qualified institutional investors’ portion was subscribed 1.77 times.
Size reduced
Some institutional shareholders offered a portion of their shares to raise ₹1,968 crore but instead, they have collectively agreed to sell for ₹1,580 crore. Each shareholder will reduce their offer of sale (OFS) by 19 per cent. The company was not affected, as it never meant to raise money through the IPO.
The selling shareholders were originally decided to sell: SCI Investments V to the tune of ₹166.74 crore; Matrix Partners India Investment Holdings II LLC (₹719.41 crore); Matrix Partners India Investments II Extension LLC (₹12.08 crore); Norwest Venture Partners X- Mauritius (₹361.44 crore); and TPG Asia VII SF Pte Ltd (₹700.31 crore).
The firm had raised ₹588 crore from anchor investors. It allotted 1.24 crore equity shares to anchor investors at ₹474 apiece, who included 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.
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