Five Star Business Finance Limited Share Price
Company Overview
Founded in 1984, Five Star Business Finance has emerged as a fastest growing NBFC by focussing on the financial needs of small businesses and self-employed individuals across the country. As on 31-March-2022, the company has built a loan portfolio of ₹ 5,067 crores, through 300 branches spread across 8 states with 5,675 employees. The quality of loan assets of the Star Business Finance is among the best in the industry with Gross NPA ratio of 1.05% as on 31-March 2022. Matrix Partners, Norwest Venture Partners, Sequoia Capital, TPG Capital, and KKR are the lead investors in the company.
As on 31-March-2022, there were 29,13,43,120 outstanding shares of Five Star Business Finance Ltd of face value of Rs 1 each. At Rs 530 share price, the total market cap of the company in the private market came to approx. Rs 15,400 crores and P/E of 33x (530/15.92).
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 ₹ 2.3 lacs during FY 2022 and the longer tenure for business loan can be upto 7 years and up to 15 years for housing loans.
Branch Network
| State | No. of Branches |
|---|---|
| Tamil Nadu | 89 |
| Andhra Pradesh | 68 |
| Karnataka | 32 |
| Telangana | 38 |
| Maharashtra | 4 |
| Chhattisgarh | 3 |
| Madhya Pradesh | 27 |
| Uttar Pradesh | 1 |
| Total | 262 |
Valuation Rounds
| Date | Transaction Name | Number of Investors | Capital Raised | Lead Investors |
|---|---|---|---|---|
| 26-Mar-21 | Private Equity Round | 4 | $234 million | KKR, Sequoia Capital |
| 23-Jul-19 | Private Equity Round | 1 | $50 million | TPG Capital |
| 31-Jul-18 | Private Equity Round | 4 | $100 million | TPG Capital |
| 09-Aug-17 | Series C | 4 | ? 3.3 billion | Norwest Venture, Sequoia Capital |
| 01-Jul-16 | Series B | 1 | ? 1.1 billion | Morgan Stanley |
| 28-Feb-14 | Series A | 1 | $ 3 million | Matrix 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.
| Symbol | Five Star Business Finance Ltd. |
|---|---|
| Face Value (₹): | 1 |
| ISIN: | INE128S01021 |
| Demat Status: | CDSL & NSDL |
| Lot Size: | 20 Shares |
Board of Directors
| Name | Designation | Profile |
|---|---|---|
| Mr. D Lakshmipathy | Chairman & Managing Director |  |
| Mr. Vikram Vaidyanathan | Investor Director, Matrix Partner | |
| Mr. A Ramanathan | Independent Director |  |
| Mr. Vasan Thirulok chand | Non-Executive Director | |
| Mr. R Anand | Independent Director | |
| Ms. Bhama Krishnamurthy | Independent Director | |
| Mr. B Haribabu | Independent Director | |
| Mr. G V Ravishankar | Investor Director, Sequoia Capital | |
| Mr. L R Raviprasad | Non-Executive Director | |
| Mr. Sanjeev Mehra | Director, TPG Capital Asia | |
| Mr. Gaurav trehan | Director – Head KKR’s Private Equity | |
| Mr. Niren Shah | Board Observer, Norwest Venture Partners | |
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.
Ratio
| Ratio | FY22 | FY21 |
|---|---|---|
| Operating Margin | 72% | 76% |
| Net Profit Margin | 36% | 34% |
| Return on Equity | 12% | 15% |
| Debt-Equity | 0.69 | 1.48 |
| Current Ratio | 2.39 | 1.66 |
| Dividend Payout | 0% | 0% |
Financial Highlights
| Particulars | 2021-22 | 2020-21 | 2019-20 | 2018-19 | 2017-18 |
|---|---|---|---|---|---|
| Total Income (₹ Crores) | 1256.17 | 1051.25 | 787.35 | 408.93 | 200.65 |
| PAT (₹ Crores) | 453.54 | 358.99 | 261.95 | 156.66 | 53.45 |
| Diluted EPS | 15.92 | 136.06 | 100.70 | 68.74 | 30.24 |
| Book Value per Share (₹) | 127.35 | 852.56 | 715.16 | 571.19 | 308.79 |
| Equity (₹ Crores) | 3710.35 | 2318.17 | 1944.58 | 1365.13 | 591.92 |
| (On 8-Sept-2021, the company went for split of 1 equity share of face value of Rs 10 each into 10 shares of face value of Rs 1 each) |
Historical Chart
Shareholding Pattern
Peer Comparison
| Company | Market Cap (₹ Crores) | Profitability Margin (%) | ROCE (%) | ROE (%) | D/E Ratio | P/E Ratio | P/B Ratio | Book Value per Share (₹) |
|---|---|---|---|---|---|---|---|---|
| FIVE STAR BUSINESS FINANCE LIMITED | 16024.00 | 36.00% | 24.00% | 12.00% | 0.69 | 34.55 | 4.32 | 127.35 |
| VARDHMAN HOLDINGS LTD | 869.00 | 4.00% | 1.00% | 15.00% | 0.00 | 2.03 | 0.42 | 8,705.00 |
| BAJAJ FINANCE LTD | 328115 | 22.00% | 43.00% | 16.00% | 1.95 | 46.68 | 7.51 | 725.00 |
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.
“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:
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.
