Chennai-based Five Star Business Finance, a non-banking financial company (NBFC), is set to go for an initial public offering (IPO). The company intends to raise Rs 1,960 crore through the IPO. The non-banking lender offers small business and small mortgage loans to eligible borrowers for their business and personal needs, using underwriting of their cashflows and housing property as collateral.
Five Star Business Finance has a strong presence in southern India, with Tamil Nadu, Andhra Pradesh, Telangana and Karnataka accounting for 85 per cent of the company’s overall portfolio (as of June 2022).
The company’s network spans 311 branches in 150 districts, 8 states, and 1 Union Territory in India. If you have also been planning to invest in the company’s IPO, here are details you must know:
1. The company has set its IPO price band range from Rs 450-474.
2. The IPO is entirely an offer for sale (OFS) of shares amounting to Rs 1,960 crore. The shares currently belong to existing shareholders and promoter group entities.
3. The general investors will be able to participate in the three-day share sale of the NBFC from November 9-11.
4. Anchor investors– institutions that are allotted shares before the IPO release– will be able to bid from November 7 onwards, a statement from the company revealed.
5. Investors will have to bid for a minimum of 31 equity shares and multiples after that.
6. For the OFS, SCI Investments V will offer Rs 166.74 crore, Matrix Partners India Investment Holdings II LLC will offer Rs 719.41 crore while Matrix Partners India Investments II Extension LLC will release shares worth Rs 12.08 crore. Northwest Venture Partners X- Mauritius will release shares to the tune of Rs 361.44 crore, while shares worth Rs 700.31 crore will be released by TPG Asia VII SF Pte Ltd.
The company posted a 19.49 per cent growth in total income at Rs 1,256.16 crores in FY22 from Rs 1,051.25 crores last year. The lender’s net profit grew to Rs 453.54 crores from Rs 358.99 crores during the period. Five Star Business Finance has the backing of investors like TPG, Matrix Partners, Norwest Ventures, Sequoia, and KKR.
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