Five Star Business Finance: History

Incorporated in the year 1984, Five Star Business Finance Limited is a Chennai based Non-Banking Finance Company with a strong presence in south India; where Andhra Pradesh, Tamil Nadu, Telangana, and Karnataka being the key states for the company.

All the loans provided by the company are secured by its borrowers’ property, predominantly being SORP.

Five Star Business Finance: Business

Five Star Business Finance Limited has created a business model based on finding an appropriate risk framework and the ideal instalment-to-income ratio to make sure that clients have the resources to repay the loan after meeting their regular obligations and other event-based capital requirements.

The Company is being backed by marquee institutional investors such as Matrix Partners, Norwest Venture Partners, Sequoia Capital, TPG Capital, KKR and TVS Capital Funds Limited.

The Company Target Customers:

• In urban and semi-urban locations, as well as in the rural markets of India, where CRISIL expects faster growth in bank credit activity as financial awareness increases;
• Who typically derive income from “everyday cash and carry businesses” with a focus on services?
• With household net cash-flows of approximately INR 25,000 to INR 40,000 per month;
• Who can provide collateral (typically land and building of approximately 1 million in value; and
• Whose family will act as co-applicants on the loan?

Five Star Business Finance: Network

As of 30 September 2022, the company had an extensive network of 311 branches spread across approximately 150 districts, 8 states, and 1 union territory.

Strategies Ahead

• Increase penetration in existing markets through increasing branch staff numbers,
• Continue to focus on small business owners and self-employed individuals primarily in the semi-urban and urban markets of India, as well as in rural markets,
• Optimize borrowing costs, reduce operating expenses further and continue to expand and diversify our lender base;
• Continue to invest in technology and data analytics to build a scalable and efficient operating model to improve customer experience,
• Focus on enhancing our risk management framework; and
• Enhance our brand recall to attract new customers.

Promoters

1. Lakshmipathy Deenadayalan,
2. Hema Lakshmipathy,
3. Shritha Lakshmipathy,
4. Matrix Partners India Investment Holdings II, LLC and
5. SCI Investments V

IPO DETAILS

Dates = 9 Nov 2022 to 11 Nov 2022

Face Value (FV) = INR 1

Issue Price = INR 450 to INR 474

Application per Share = INR 474

Minimum Investment Amount = INR 14694

Minimum Bid = 31 Shares

Listing On = BSE, NSE

FINANCIALS

Conclusion

Considering the company’s financial parameters, FinBlab recommends SUBSCRIBE ratings on five star business finance ipo

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