Listing Status: DRHP Approved
Five Star Business Finance provides Small business loans to meet borrower requirements for commencing new businesses, expansion of their existing businesses and settling any unorganized dues they have taken to further their businesses.
The loans are given based on Five Star Business Finance management’s evaluation of the borrower's household cashflows coupled with the security of the borrower’s house collateral.
The typical loan ticket of Five Star Business Finance ranges between Rs 1 lakh to Rs 10 lakhs for a tenure between 24 and 84 months. The repayments are to be made on a monthly equated basis.
Five Star Business Finance’s Geographical Presence
Five Star Business Finance has an extensive network of 268 branches as of September 30, 2021, spread across 8 states. Tamil Nadu, Andhra Pradesh, Telangana and Karnataka being our key states. Such key states collectively accounted for approximately 85% of branch network by number.
Underwriting Model of Five-Star Business Finance
Five Star Business Finance has a two-layered underwriting architecture comprising a field credit team that is “on the ground” and closer to the customer (the “Field Credit Team”); and a file credit team that remotely reviews loan applications and undertakes credit decisioning (the “File Credit Team”). Five Star Business have implemented a comprehensive and robust credit assessment, risk management and collections framework to identify, monitor and manage risks inherent in their line of business.
Financing sourced by Five Star Business Finance
Five Star Business Finance secures financing from diversified sources of capital, including
- term loans;
- proceeds from loans securitized;
- proceeds from the issuance of NCDs;
- issuances of principal protected market-linked debentures;
- proceeds from loans assigned from banks,
- financial institutions,
- mutual funds, and other domestic and international development financial institutions.
The sector has been plagued with worsening asset quality, which has reached 17.5% in fiscal 2019 as compared to 7.2% in fiscal 2015. This has led to the gradual reduction of the share of industry credit in the overall banking sector’s credit. CRISIL Research expects the growth to stay low in this sector on account of the cautious approach taken by lenders.
Unaudited Financial results for the quarter ended 30th June, 2022
|Particulars (in Crores)||Quarter Ended June2022||Quarter Ended June 2021||Year Ended 2022|
|Employee Benefit Expense||71.88||51.54||236.11|
|Total Operating Cost||84.47||79.83||339.1|
|Operating Profit (EBITDA)||253.5||222.63||914.96|
|Depreciation and Amortization Expense||3.61||2.6||12.24|
|Profit Before Interest and Taxes||250.97||220.27||904.82|
|Profit Before Tax and Exceptional Items Before Tax||186.18||133.86||604.22|
|Exceptional Items Before Tax||0||0||0|
|Profit Before Tax||186.18||133.86||604.22|
|Profit for the Period||139.46||99.74||453.55|
|Earning per share(EPS)||4.79||3.73||16.09|
|Paid up Equity Capital||29.13||27.11||29.13|
|Reserves(excluding Revaluation Reserve)||3827.84||2916.33||3681.22|
|Debt - Equity Ratio||0.65||1.06||0.69|
Despite the pandemic, the Five Star Business Finance achieved the following milestones during the financial year ended March 31, 2021 - The borrower base crossed 1,75,000 during the year. Gross NPA of 1.02%, which is a good asset quality metric across the financial services industry, is lower than the 1.37% that the Five Star Business Finance had in March 2020. As at March 31, 2021, the total assets under management of Five Star Business Finance increased to Rs 4639.2 Cr in FY22 from Rs 4445.3 Cr in FY21, registering a growth of 4.36%. Profit before tax of Five Star Business Finance was at Rs 476.44 Cr in FY22 up by 36.40% over FY21 at Rs 349.30 crores. At Rs 358.99 Cr, Profit After Tax of Five Star Business Finance was higher by 37.05% over the previous year’s Rs 261.95 crores. The Five Star Business Finance was valued at 1.4 billion dollars, making it a coveted ‘Unicorn”. with 2 new investors viz. KKR and TVS Capital, have chosen to invest in Five Star Business Finance.
Fundraise - Five Star Business Finance
Five Star Business Finance has raised over INR 1900 Cr (US$260mn) in equity and is backed by marquee private equities including TPG, Matrix, Norwest, Sequoia, KKR, and TVS Capital. In March 2021, Five Star Business Finance had raised INR 1,700 crore from new and existing investors at a valuation of INR 10,300 crore.
List of all fundraise done by Five Star Business Finance
IPO Updates of Five Star Business Finance
Nov 21: The Chennai-headquartered NBFC, Five Star Business Finance had filed its draft red herring prospectus (DRHP) in November 2021.
Jan, 22: Five Star Business Finance, has received approval from markets regulator SEBI to raise Rs 2,752 crore through an initial public offering (IPO).
The IPO is entirely an offer for sale. The company will not receive any proceeds from the offer.
OFS in IPO by existing investors of Five Star Business Finance
|TPG Asia||INR 1350 Cr|
|Matrix Partners||INR 579 Cr|
|Norwest Venture||INR 385 Cr|
|Sequoia Capital India||INR 257 Cr|
|Promoters (Deenadayalan Rangasamy and Varalakshmi)||INR 181 Cr|
Profit and Loss
DEENADAYALAN LAKSHMIPATHY - Managing Director
Shareholding in the company - 13.65 %
KRANGARAJAN - Chief Executive Officer
Shareholding in the company - 1.01 %
GOPALAKRISHNAN SRIKANTH - Chief Financial Officer
Shareholding in the company - 0.35 %
LANKUPALLI RAVIPRASAD RAGHAVAN - Director
Shareholding in the company - 0.31 %
BALARAM HARIBABU - Director
Shareholding in the company - 0.18 %
SHALINI BASKARAN - Company Secretary
ARJUN SAIGAL - Alternate Director
LING WEI ONG - Director
SANJEEV MEHRA - Director
RAVI SHANKAR VENKATARAMAN GANAPATHY AGRAHARAM - Director
VIKRAM VAIDYANATHAN - Director
THIRULOKCHAND VASAN - Director
RAMANATHAN ANNAMALAI - Director
BHAMA KRISHNAMURTHY - Director
ANAND RAGHAVAN - Director
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19/10, Guru Vappa Chetty Street, Chintadripet, Chennai - 600002
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