From Wednesday, 9 November, the public can begin subscribing to the initial public offering (IPO) of non-banking financial company Five Star Business Finance. The Chennai-based company’s three-day public issue will end on November 11. The bidding for anchor investors took place on 7 November. The entire IPO consists of an offer for sale by current shareholders and promoter group firms. The price range for the public offering has been set by the company at Rs 450-474 per share. Investors can submit bids for a minimum of 31 shares and subsequently in multiples of 31 shares.
The issue’s book-running lead managers are ICICI Securities, Kotak Mahindra Capital Company, Edelweiss Financial Services, and Nomura Financial Advisory and Securities (India) Private Limited. Investors like TPG, Matrix Partners, Norwest Ventures, Sequoia, and KKR are among those who sponsor Five Star Business Finance. Currently, Matrix Partners holds a 12.67 per cent stake in the firm, Norwest Venture owns 10.17 per cent, SCI Investments has 8.79 per cent, TPG Asia holds 21.45 per cent, and Norwest Venture possesses 12.67 per cent.
Matrix Partners India Investment Holdings II LLC will sell shares worth Rs 719.41 crore, while Matrix Partners India Investments II Extension LLC will divest shares amounting to Rs 12.08 crore. Norwest Venture Partners X-Mauritius will also sell stock worth Rs 361.44 crore, while SCI Investments V will offload stock worth Rs 166.74 crore and TPG Asia VII SF Pte Ltd will sell shares worth Rs 700.31 crore in the offer for sale.
The firm recorded a 19.49 per cent increase in total revenue to Rs 1,256.16 crore in FY22 from Rs 1,051.25 crore in FY2. A 19.49 per cent increase in Five Star’s net profit (Rs 453.54 crore) was also recorded. As of March 31, 2022, it had Rs 5,100 crore in assets under management.
Five Star Business Finance gives secured business loans to microbusiness owners and independent contractors who are often left out of the financial mainstream. All loans are secured against the borrowers’ property, which is primarily self-occupied residential property. The company has a significant presence in south India.