Five Star Business receives Rs 588 crore in funding from 16 anchor investors

• ByStartupStory     |    November 9, 2022

Five Star Business Finance, a provider of small business and mortgage loans, has successfully Raised 588 crore (approximately $72 million) in funding from 16 anchor investors, including Abu Dhabi Investment Authority (ADIA), Fidelity Investments, Capital Research, and White Oak, among others, ahead of its stock market debut.

According to the company’s announcement, TPG-backed Five Star Business Finance has chosen to distribute 1,24,05,094 (1.24 crore) equity shares to anchor investors at Rs 474 each, bringing the total transaction amount to Rs 588 crore. The IPO is strictly an offer for sale (OFS), with stockholders offloading stakes worth Rs 1,960 crore. The offer price range is Rs 450-474 per share. The non-banking finance corporation (NBFC) located in Chennai has agreed to distribute 90,06,316 (90 lakh) shares to nine foreign portfolio investors (FPIs) for a total of Rs 426.90 crore. Capital Research, Fidelity Investments, Abu Dhabi Investment Authority, Norges Bank, Carmignac Gestion, White Oak, Malabar Investments, Bay Capital, and Segantii are among the recipients, according to the release. Enam, SBI Life Insurance, HDFC Mutual Fund, Baroda BNP Mutual Fund, Edelweiss Mutual Fund, Mirae Mutual Fund, and Gee Cee Ventures, among others, participated in the anchor book.

Companies such as ICICI Securities, Edelweiss Financial Services, Kotak Mahindra Capital Company, and Nomura Financial Advisory and Securities (India) are functioning as book-running lead managers (BRLM) for the IPO. The offer is registered with KFin Technologies. Five Star Business Finance offers secured business loans to micro-entrepreneurs and self-employed individuals, both of whom are generally overlooked by traditional lending institutions.

Until 30, 2022, the company had 311 branches distributed throughout around 150 districts, eight states, and one union territory, with Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka being its core states. The company’s total assets are estimated to be about Rs 6,471.55 crore. Five Star Business reported revenue of Rs 1,254.06 crore in FY22, up from Rs 1,049.74 crore in FY21. Gross term loans were Rs 5,067.07 crore in FY22, up from Rs 4,445.38 crore the previous year, while disbursements increased to Rs 1,756.24 crore in FY22, up from Rs 1,245.05 crore in FY21.

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