Continuing its bullish trend, shares of Five Star Business Finance hit an all-time high of ₹687.70 apiece during Wednesday's intra-day trade after the stock locked in the 20% upper circuit in the previous trading session.
In the last week, the stock has risen from ₹500 to ₹624.35, representing a return of 24.87%. At 2:30 p.m., the stock was trading at ₹606, down by 2.93% on the BSE.
The stock was recently listed on the exchanges on November 21, 2022. The NBFC had mopped up ₹1,960 crore through its IPO. The South Indian shadow lender has reduced its issue size from ₹2,752 crore previously. The IPO was subscribed 0.70 times.
The stock made a muted debut on the exchanges as it lists with a discount of nearly 1% at ₹468.80 against its issue price of ₹474 apiece. Later, it ended the first day with a 3.4% gain at ₹490.
The stock has experienced a one-way rally since then, and it is now up by nearly 31.71% compared to its issue price of ₹474.
The company provides secured business loans to micro-entrepreneurs and self-employed individuals in urban, semi urban and rural markets, operating in eight states and one union territory with 311 branches as of June 2022.
FSBF is headquartered in Chennai with a strong presence in South India, and all loans are secured by the borrower’s property. FSBF is a player with healthy fundamental performance and robust growth in the fast growing small business finance market, ICICI Direct Research said in its IPO note.
The underwriting model of the company recognises those customers with the ability and willingness to repay the loans by studying their character, cash flow, and collateral, Chola Wealth Direct said in its IPO note.
"It has deployed an apt underwriting model that assesses the suitability of the customers that are onboarded, minimising the risk of default," the brokerage added.
The NBFC posted a 19.49 percent growth in total income to ₹1256.16 crore in FY22 from ₹1051.25 crore in FY21, while its net profit stood at ₹453.54 crore in FY22 from ₹358.99 crore in FY21.
For Q2 FY23, the company posted a 22.03 percent YoY jump in its standalone net profit of ₹144 crore as against a net profit of ₹118 crore in the same quarter of the last fiscal. Sequentially, the net profit was up by a mere 3.59 percent.
The revenue for the quarter increased by 17.20% to ₹361 crore from ₹308 crore in the previous fiscal year's corresponding quarter.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.