Incorporated in 1984, Five Star Business Finance Limited is a Chennai-based company that provides small loans and small mortgages to self-employed individuals and small entrepreneurs, who are excluded by large financial institutions. They have over 250 branches in over 125 districts, 8 states, and 1 union territory. The key states for their business are Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka.
Five Star Business Finance Limited has created a business model based on identifying an appropriate risk framework and the ideal installment-to-income ratio to make sure that customers have the resources to repay the loan after meeting their regular obligations and other event-based capital requirements.
The company is headquartered in Chennai, Tamil Nadu with a strong presence in south India, and has provided loans to more than 185,000 customers in total. They had an active loan base of 230,175 and 217,745 as of June 30, 2022, and March 31, 2022, respectively.
With more than 30,000 million in AUM, the company has the fasted AUM growth among the compared peers. As of June 30, 2022, and March 31, 2022, the Total Borrowings were Rs 25,203.19 million and Rs 25,588.31 million, respectively. With more than Rs 3000 crore in assets under management (AUM), the Chennai-headquartered company has the fastest AUM growth among peers, with a compound annual growth rate of 65.0%.
Facts about the Company
Five Star Business Finance Ltd plans to continue to focus on small business owners and self-employed individuals & increase their market share.
The company is able to identify local-level opportunities, ensure careful customer selection, timely loan approval disbursals, and efficient real-time monitoring of collections.
Registered Non-Banking Finance Company (NBFC-ND-SI) with the RBI.
It has a strong presence in south India, and all loans are secured by the borrower's property, predominantly being self-occupied residential property.
Points to note before investing in the IPO
The company continues to focus on small business owners and self-employed individuals primarily in the semi-urban, rural and urban markets of India, where CRISIL expects faster growth in bank credit activity as financial awareness increases.
Further, as of June 30, 2022, the company's net profit stood at ₹139.43 crores, while the net profit margin was at 41.12%.
As of June 2022, Tamil Nadu, Andhra Pradesh, Telangana and Karnataka accounted for 85% of the overall portfolio.
Five Star has grown from 252 branches in 2020 to 311 branches in June 2022, across 8 states and 1 Union territory.
Objective of the IPO
The Company will not receive any proceeds from the Offer and all such proceeds will go to the Selling Shareholders.
Allotment, Listing & Refund Details
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