Five Star Business Finance Limited Share Price

Buy

₹ 470

Sell

₹ 530

Under Valued

Company Overview

Founded in 1984, Five Star Business Finance has emerged as a fastest growing NBFC by focusing on the financial needs of small businesses and self-employed individuals across the country.  As on 31-March-2021, the company has built a loan portfolio of ₹ 4445 crores, through 262 branches spread across 8 states with 3,938 employees. The quality of loan assets of the Star Business Finance is among the best in the industry with Gross NPA ratio of 1.02% in March 2021. Matrix Partners, Norwest Venture Partners, Sequoia Capital, TPG Capital, and KKR are the lead investors in the company. 

Business Model

The company lends secured business loans and mortgage loans to the small business people located in the rural and semi-urban areas of the country. The target clients of Five Star Business range from small shop owners, maids, flower vendors, small and medium enterprises, which are left unbanked by traditional channels of finance. The company uses a unique cash flow based loan appraisal system to ensure fast loan sanction and disbursal to its clients. 

The USP of the Star Business finance lies in extending quick disbursal of small ticket loans with longer duration and simple documentation. The average ticket size of loan per borrower was ₹ 2.5 lacs during FY 2021 and the longer tenure for business loan can be upto 7 years and up to 15 years for housing loans.

Branch Network

StateNo. of Branches
Tamil Nadu89
Andhra Pradesh68
Karnataka32
Telangana38
Maharashtra4
Chhattisgarh3
Madhya Pradesh27
Uttar Pradesh1
Total262

Valuation Rounds

DateTransaction NameNumber of InvestorsCapital RaisedLead Investors
26-Mar-21Private Equity Round4$234 millionKKR, Sequoia Capital
23-Jul-19Private Equity Round1$50 millionTPG Capital
31-Jul-18Private Equity Round4$100 millionTPG Capital
09-Aug-17Series C4? 3.3 billionNorwest Venture, Sequoia Capital
01-Jul-16Series B1? 1.1 billionMorgan Stanley
28-Feb-14Series A1$ 3 millionMatrix Partners

Partners

Matrix Partners India , Morgan Stanley Pvt Equity Asia, Norwest venture Partners, Sequoia Capital, TPG Capital, Axis Trustee Services Ltd, IDBI Trusteeship Services Ltd, Various leading lending banks such as HDFC, RBL, KOTAK, FEDERAL, YES, etc. and NBFCs and AMCs, such as Tata Capital, Chola, Sundaram Finance, etc.

Registered office

The registered office of the company is located at New No 27, Old No 4, Taylor’s Road, Kilpauk, Chennai.

SymbolFive Star Business Finance Ltd.
Face Value (₹):1
ISIN:INE128S01021
Demat Status:CDSL & NSDL
Lot Size:20 Shares

Board of Directors

NameDesignationProfile
Mr. D LakshmipathyChairman & Managing Directorlinkedin
Mr. Vikram VaidyanathanInvestor Director, Matrix Partnerlinkedin
Mr. A RamanathanIndependent DirectorNA Final 1
Mr. Vasan Thirulok chandNon-Executive DirectorNA Final 1
Mr. R AnandIndependent DirectorNA Final 1
Ms. Bhama KrishnamurthyIndependent DirectorNA Final 1
Mr. B HaribabuIndependent DirectorNA Final 1
Mr. G V RavishankarInvestor Director, Sequoia Capitallinkedin
Mr. L R RaviprasadNon-Executive DirectorNA Final 1
Mr. Sanjeev MehraDirector, TPG Capital Asialinkedin
Mr. Gaurav trehanDirector – Head KKR’s Private Equitylinkedin
Mr. Niren ShahBoard Observer, Norwest Venture Partnerslinkedin

Key Business Highlights

  • ‘Unicorn’ NBFC, Strong Business Network in Niche Unbanked Segment, Expertise in Distribution of Small Ticket Mortgage Loans, Business CAGR during Last 4 Years: 90%
  • AUM Size: ₹ 4,445 crores, 262 Branches in 8 States, 4000 employees.
  • Best Loan Asset Quality in Industry, Gross NPA 1.02% and Net NPA 0.84%.
  • Backed by Marquee Private Equity Investors- Matrix Partners India, Norwest Venture Partners, Sequoia Capital, TPG Capital, and KKR.

Financial Highlights

Particulars2021-222020-212019-202018-192017-18
Total Income (₹ Crores) 1256.171051.25787.35408.93200.65
PAT (₹ Crores) 453.54358.99261.95156.6653.45
Diluted EPS 15.92136.06100.7067.3930.24
Book Value per Share (₹) 126.19852.56715.16571.19308.79
Equity (₹ Crores) 3710.352318.171944.581365.13591.92

Financial Charts

Historical Chart

Shareholding Pattern

Peer Comparison

CompanyMarket Cap (₹ Crores)Profitability Margin (%)ROCE (%)ROE (%)D/E RatioP/E RatioP/B RatioBook Value per Share (₹)
FIVE STAR BUSINESS FINANCE LIMITED1637.2036.11%24.27%12.22%0.693.330.44126.19
VARDHMAN HOLDINGS LTD869.004.47%1.14%15.45%0.002.030.428,704.80
BAJAJ FINANCE LTD32811522.21%43.25%16.07%1.9546.687.51724.56

Media Updates

“Five Star Business Finance gets SEBI nod for Rs 2,752 cr-IPO”

Five Star Business Finance, backed by TPG, Matrix Partners and Norwest Ventures, has received approval from markets regulator Sebi to raise Rs 2,752 crore through an initial public offering (IPO).

The Chennai-headquartered NBFC provides secured business loans to micro-entrepreneurs and self-employed individuals, each of whom are largely excluded by traditional financing institutions.

The IPO is entirely an offer for sale. The company will not receive any proceeds from the offer.

Read more: https://economictimes.indiatimes.com/markets/ipos/fpos/five-star-business-finance-gets-sebi-nod-for-rs-2752-cr-ipo/articleshow/88815144.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

With the latest $234-m fund-raise, Chennai-based NBFC Five-Star turns a unicorn

Five Star Business Finance Ltd, a Chennai-headquartered non-banking finance company, has raised ₹1,700 crore ($234 million) from a consortium of global and Indian investment firms, led by Sequoia Capital India, with participation from Norwest Venture Partners, and new investors led by KKR with participation from TVS Capital. The investment values the company at ₹10,300 crore ($1.4 billion). 

Read more:

https://www.thehindubusinessline.com/money-and-banking/chennai-based-nbfc-five-star-business-finance-limited-raises-1700-crore/article34169522.ece

Frequently Asked Questions (FAQs) on Five Star Business Finance Unlisted Shares

The buying and selling of unlisted shares, and pre-IPO shares is fully legal and valid.

The procedure to buy the Five Star Business Finance Ltd shares is fairly simple. Once you have settled on the price and quantity of the transaction, you would have to transfer the funds into the bank account of the seller. Once the funds are transferred and transaction details are shared with the seller, your demat account will be credited with the shares either on the same day of the fund transfer or before the end of the next working day. 

In the secondary market, the transactions related to unlisted shares take place with the existing owners of the shares who are generally the employees or existing investors in the company. The company itself is not directly involved.

The Five Star Business Finance Ltd shares will get credited either the same day or before the end of the next working day when you transfer the funds into our bank account.

The minimum lot size varies on the basis of market conditions and demand and supply factors. To know the current lot size for Five Star Business Finance, please visit the stock page on our website: www.delistedstocks.in/current-offerings/current-offerings/five-star-business-finance-limited/

There are many factors which influence the pricing of unlisted shares. Apart from the supply and demand factors, the latest transactions happened on the same stock, last funding round of the company, and valuation level of companies of the similar size affect the pricing of the unlisted shares.

Before IPO, there is no restriction on sale and transfer of your Five Star Business Finance Ltd shares. But once the shares are listed on the stock exchange, for retail investors, there is a minimum lock-in period 6 months after listing on the stock exchange.

Once the selling price and quantity of shares is agreed with us, we will provide you with an UTR (Unique Transaction Reference) number to transfer the shares. Once you have transferred the shares into our company’s demat account, funds are released into your bank account within 24 hours or before the end of the next working day of the transfer of the shares.

If your holding period is less than 2 years, then such income is treated as business income and liable to get taxed as per tax slab of the investor. If your holding period is more than 2 years, then your profits would be subject to long-term capital gains tax. The current short-term capital gain tax rate is 20% after indexation.

The trading in unlisted shares is governed by Securities & Contract (Regulation) Act, which comes under the preview of SEBI.  The SEBI regulations become applicable when the stocks of the company get listed on the stock exchange. There is a minimum lock-in period of 6 months for pre-IPO investors.

The major risk associated with investing in unlisted stocks is the liquidity risk. The possible exit route for investors is either to sell to another investor or wait till the company gets listed on the stock exchange.

Yes, NRI’s can also buy and sell Five Star Business Finance Ltd shares just like domestic investors. But their investment is on a non-repatriable basis.

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