Five Star Business Finance IPO

Five Star Business Finance IPO | Review

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Five Star Business Finance Limited has come up with an initial public offer (IPO). It will open on November 09-11, 2022 at Rs.450-474 a share. The IPO issue size is around Rs.1,960.01 crores. The minimum bid will be for 31 shares and in its multiples thereafter.

Overview

Five Star Business Finance Limited was incorporated in 1984. It is an NBFC-ND-SI providing secured business loans to micro-entrepreneurs and self-employed individuals. Each of them are largely excluded by traditional financing institutions. The company is headquartered in Chennai, Tamil Nadu with a strong presence in south India and all of its loans are secured by borrowers’ property.

The company has developed a business model that is predicted on arriving at an appropriate risk framework, with the optimal installment to income ratio to ensure that customers have the necessary means to repay the loan. It primarily offers customers small loans for business purposes. Additionally, it also provides loans for asset creation such as home renovation or improvement, or for meeting expenses for significant economic events such as marriage, healthcare and education.

Five Star Business Finance has 2,30,175 accounts, 311 branches & 19,793 no. of loans disbursed. On June 30, 2022, it had 6,077 no. of employees and Rs.52,965.35 millions Gross Term Loans.

Website https://fivestargroup.in/

Promoters

Lakshmipathy Deenadayalan – 10.49%Hema Lakshmipathy – 7.14%
Shritha Lakshmipathy – 0.07%Matrix Partners India Holdings – 12.46%
SCI Investments V – 8.79% 

Promoter Holding

Pre-Issue Shareholding – 40.07%Post-Issue Shareholding -33.65%

Strength & Weakness

StrengthsWeaknesses
Fastest Gross Term Loans growthRequire substantial capital for business
Significant potential addressable marketVolatility in interest rates
Strong “on-ground” collections infrastructure lendingThe risk of non-payment or default by our borrowers
Calibrated expansion strategyNegative net cash flows in the past
Robust risk managementHighly competitive industry
Access to diversified and cost-effective long-term financingCompany is involved in certain legal proceedings
Experienced promoter & professional management teamPrimarily focused in the states of Tamil Nadu, Andhra Pradesh, Telangana and Karnataka
Comprehensive credit assessmentDependent on a number of Key Managerial Personnel

Competitors

Shriram City Union Finance LtdVistaar Financial Services Pvt Ltd
Aavas Financiers LtdAye Finance
Lendingkart Technologies Pvt LtdDigikredit Finance Pvt Ltd
AU Small Finance BankAavas Financiers Ltd
Home First Finance Company IndiaAptus Value Housing Finance India

Company Financials

YearRevenue (in Crore)Profit (in Crore)
31-Mar-2020787.35261.95
31-Mar-20211051.26358.99
31-Mar-20221256.17453.54
30-Jun-2022339.06139.43

Object of Issue

1) To carry out the Offer for Sale.

2) To achieve the benefits of listing the Equity Shares on the Stock Exchanges.

Five Star Business Finance IPO Lot Size

ApplicationLotSharesAmount
Retail (Min)131Rs.14,694
Retail (Max)13403Rs.1,91,022
S-HNI (Min)14434Rs.2,05,716
B-HNI (Max)692,139Rs.10,13,886

Five Star Business Finance IPO Details

IPO Opening Date November 09, 2022
IPO Closing Date November 11, 2022
Face Value Rs.1 per Equity Share
IPO Price Rs.450-474 per share
Market Lot 31 shares
Minimum Order Quantity 31 shares
Listing At NSE, BSE
No. of shares offered (OFS)4,13,51,266 shares
Issue Size Up to Rs.1,960.01 Crore
QIB Shares Offered 50% of the offer
Retail Shares Offered 35% of the offer 
NII/HNI Shares Offered 15% of the offer 

Five Star Business Finance IPO Timetable

IPO DateNovember 09-11, 2022
Allotment DateNovember 16, 2022
Initiation of RefundsNovember 17, 2022
Credit of share to Demat a/cNovember 18, 2022
IPO Listing DateNovember 21, 2022

Allotment Status

KFin Technologies – https://ris.kfintech.com/ipostatus/

Book Lead Managers

Registrar

About the author

Shankar Awale

Hey! I am Shankar Awale an aspiring blogger with an obsession for all things of Finance. This blog is dedicated to help people to learn about Financial Knowledge in easy language.

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