About the Company:
Five Star Business Finance Ltd is an NBFC-ND-SI providing secured business loans to micro-entrepreneurs and self-employed individuals, each of whom are largely excluded by traditional financing institutions.
Company is headquartered in Chennai, Tamil Nadu with a strong presence in south India and all of our loans are secured by our borrowers’ property, predominantly being SORP.
Over 95% of company’s loan portfolio comprises loans from between Rs. 1 Lakh to Rs.10 Lakh in principal amount, with an average ticket size (“ATS” and calculated as the average disbursed sum per customer during the period/year) of Rs.2.8 Lakhs inthe Financial Years 2022.
During the three months ended June 30, 2022 and June 30, 2021, and the Financial Years 2022, 2021 and 2020, company has provided loans to more than 205,000 customers in total and had an active loan base of 230,175 and 217,745 as of June 30, 2022 and March 31, 2022, respectively.
Company’s Branch Network:
Company has an extensive network of 311 branches, as of June 30, 2022, spread across approximately 150 districts, eight states and one union territory, with Tamil Nadu, Andhra Pradesh, Telangana and Karnataka being our key states.
Such key states collectively accounted for approximately 85% of our branch network by number, as of June 30, 2022.
Fast Loan Processing:
Company has leveraged established processes and technology in many of our business processes and reduced the turnaround time from login to loan sanction from an average of 20 days for loans sanctioned in Financial Year 2018 to 17 days, and 15 days in Financial Years 2019, and 2020 respectively.
Marquee institutional investors in the Company:
Company is backed by marquee institutional investors such as TPG Capital, Sequoia Capital, Matrix Partners, Norwest Venture Partners, KKR and TVS Capital Funds Limited.
Company’s target customers:
- in urban and semi-urban locations, as well as in the rural markets of India, where CRISIL expects faster growth in bank credit activity as financial awareness increases.
- who typically derive income from “everyday” cash and carry businesses with a focus on services.
- with household net cash-flows of approximately Rs.25,000 to Rs.40,000 per month.
- who can provide collateral (typically land and building of approximately Rs.10 Lakhs in value; and
- whose family will act as co-applicants on the loan.
Company’s key operational and financial metrics as of and for the periods/years indicated:
Competition in the Business:
Company’s competitors are Shriram City Union Finance Limited, Aavas Financiers Limited, Home First Finance Company India, Aptus Value Housing Finance India and AU Small Finance Bank.
Management Team:
- Mr. Lakshmipathy Deenadayalan (Designation: Chairman and Managing Director)
- Mr. Anand Raghavan (Designation: Independent Director)
Objectives of the Issue:
Offer for Sale: (Rs.1960 cr )
- Each of the Selling Shareholders will be entitled to the proceeds of the Offer for Sale. Company will not receive any proceeds from the Offer for Sale.
Financials of the Company:
| (in Crores) | FY 20 | FY 21 | FY 22 | 30th June 22 |
|---|---|---|---|---|
| Revenue | 787.3 | 1051.2 | 1256.1 | 339.0 |
| Net Profit | 261.9 | 358.9 | 453.5 | 139.4 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Five-Star Business Finance Ltd | 1 | 15.92 | 29.77 | 13.86% | 127.35 |
| Aavas Financiers Ltd | 10 | 44.81 | 46.02 | 12.66% | 355.53 |
| Aptus Value Housing Ltd | 2 | 7.53 | 43.29 | 12.69% | 58.68 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 9th November 2022 |
| Issue Closes on:. | 11th November 2022 |
| Issue Price | Rs.450 – 474 |
| Face Value | Rs.1 |
| Retail Category Allocation | 35% |
| Minimum Lot | 31 Shares |
| Minimum Investment | Rs.14,694 |
| Issue Constitutes | 14.19% |
| Issue Size | Rs.1960 cr ($235 million) |
| Market Cap | Rs.13810 cr ($1.67 billion) |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 4,13,50,210 |
| Equity Shares Prior to the Issue | 29,13,66,120 |
| Equity Shares after the issue | 29,13,66,120 |
Also Read : List of Upcoming IPO’s in India.
Also Read : List of Upcoming SME IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | on or Before 16th November 2022 |
| Initiation of Refunds | on or Before 17th November 2022 |
| Credit of Equity Shares: | on or Before 18th November 2022 |
| Listing Date: | on or Before 21st November 2022 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 15.92 | 29.77 | 13.86% | 127.35 |
| Company Contact Info: |
|---|
| Five Star Business Finance Ltd New No. 27, Old No. 4, Taylor’s Road, Kilpauk, Chennai 600 010, Tamil Nadu, India Tel: +91 44 4610 6260 Email: cs@fivestargroup.in Website: www.fivestargroup.in |
| IPO Registrar Info: |
|---|
| KFin Technologies Limited Selenium, Tower B, Plot No. 31 and 32 Financial District Nanakramguda, Serilingampally Hyderabad, Rangareddi 500 032 Telangana, India Tel: +91 40 6716 2222 E-mail: fsbfl.ipo@kfintech.com Website: www.kfintech.com |
