Matrix-backed Five Star Business IPO TPG to Open Nov. 9


A provider of small business loans and mortgages, Five Star Business Finance is set to launch its initial public offering (IPO) on November 9. The IPO is purely an offer of sale (OFS) and shareholders will offload stakes up to ₹1,960 crore. Subscriptions to this IPO will be authorized until 11 November. That being said, the company will offer shares to anchor investors on November 7 ahead of the IPO.

Among the sellers shareholders are — promoters SCI Investments V and Matrix Partners India Investment Holdings II, LLC which will offload holdings totaling ₹166.74 crore and ₹719.41 crore respectively. Other investors like Matrix Partners India Investments II Extension, LLC will offer shares up to ₹12.09 crore, Norwest Venture Partners X – Mauritius to sell stakes worth ₹361.45 crore and TPG Asia VII SF selling shares worth ₹700.32 crore.

Since the whole Initial Public Offering is OFS, the proceeds of the issue will not be used by Five Star Business Finance but will instead be returned to the selling shareholders mentioned above.

The equity shares offered in the IPO have a par value of Re 1 each. The price range for the issue is set at ₹450 per share to ₹474 per share respectively.

Of the total issuance, 50% of the IPO size is reserved for Qualified Institutional Buyers (QIBs), while 15% is reserved for Non-Institutional Investors (NIIs) and the remaining 35% will be allocated to individual investors. retail (RII).

Companies like ICICI Securities, Edelweiss Financial Services, Kotak Mahindra Capital Company and Nomura Financial Advisory and Securities (India) are acting as lead bookkeeping managers (BRLM) for the IPO. KFin Technologies is the registrar of the offering.

Five Star Business Finance is an NBFC-ND-SI that offers secured business loans to micro-entrepreneurs and the self-employed, each largely excluded from traditional finance institutions. The company is based in Chennai, Tamil Nadu with a strong presence in South India.

The company has developed a business model that relies on getting the right risk framework, with the optimal payout to income ratio to ensure our customers have the means to repay the loan after meeting their regular obligations and other events. capital needs.

As of June 30, 2022, Five Star Business has an extensive network of 311 branches spread across approximately 150 districts, eight states and one union territory, with Tamil Nadu, Andhra Pradesh, Telangana and Karnataka being its states keys.

Additionally, as of June 30, 2022, the company’s net profit stood at ₹139.43 crore, while the net profit margin was 41.12%. Net worth stood at ₹3,856.97 crore during the period.

In FY22, Five Star Business recorded total revenue of ₹1,256.16 crore compared to ₹1,051.25 crore in FY21. Operating revenue was ₹1,254, ₹06 crore in FY22 from ₹1,049.74 crore in FY21. Gross term loans stood at ₹5,067.07 crore during FY22 compared to ₹4,445.38 crore during FY21. Its disbursements increased to ₹1,756.24 crore in FY22 from ₹1,245.05 crore in FY21.

As of June 30, 2022, the company’s total assets are approximately ₹6,471.55 crore.

Among its strategies, Five Star Business plans to increase penetration in existing markets by increasing the number of branch employees, expanding its branch network in existing geographies, and diversifying into contiguous markets.

The company continues to focus on small business owners and the self-employed, primarily in India’s semi-urban and urban markets, as well as rural markets where Crisil expects faster business growth. bank credit activity as financial awareness increases.

Additionally, the company is focusing on improving its brand recall to attract new customers.

After the issuance of the IPO, Five Star Business Finance will be listed on BSE and NSE.

About Florence L. Silvia

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