Raised Rs 588 crore from anchor investors including Smallcap World Fund Inc, American Funds, Fidelity Funds, Volrado Venture, Abu Dhabi Investment Authority, Government Pension Fund Global, Carmignac Portfolio, and Segantii India Mauritius among others

MUMBAI, NOVEMBER 10, 2022 (GPN):  Five Star Business Finance Limited, provides secured business loans to micro-entrepreneurs and self-employed individuals, each of whom are largely excluded by traditional financing institutions has received bids of 97,81,244 shares against the offered 3,04,88,966 equity shares, at a price band of ₹450-474, according to the data available on the stock exchanges. Overall the issue was subscribed 0.32 times on the first day of bidding.

The reserved portion for qualified institutional buyer was fully subscribed. The Retail Portion was subscribed 0.06 times. Non-Institutional segment saw a response of 0.02 times. The issue kicked off for subscription on Wednesday, November 09, and will close on Friday, November 11, 2022.

Five Star Business Finance Ltd raised Rs 588 crore from foreign investors and institutions namely Smallcap World Fund Inc, American Funds, Fidelity Funds, Volrado Venture, Abu Dhabi Investment Authority, Government Pension Fund Global, Carmignac Portfolio, and Segantii India Mauritius and domestic mutual funds and other firms including HDFC Mutual Fund, Baroda BNP Paribas, Edelweiss, Mirae Asset, and SBI Life Insurance Company also participated in the anchor book.

Broking houses like Anand Rathi, Hem Securities, Marwadi Shares, Reliance Broking and BP Wealth have given a “Subscribe” rating to the issue

Five-Star Business Finance Ltd, with more than 30,000 million in Gross Term Loans and a 100% in-house sourcing, credit, risk, and collections staff, the firm has the quickest Gross Term Loans growth among comparative peers. Five Star’s development has been mostly volume driven by growing their client base while maintaining a steady ATS (Average ticket size). The company has established a strong four-layered client credit evaluation technique and only makes secured loans where more than 95% of the collateral is a self-occupied residential property. Besides, they are backed by marquee institutional investors such as TPG Capital, Sequoia Capital, Matrix Partners, Norwest Venture Partners, KKR and TVS Capital Funds Ltd.

The offer is an Offer for Sale aggregating to ₹ 1960 crore by the company’s promoters and existing shareholders.

ICICI Securities Limited, Kotak Mahindra Capital Company Limited, Edelweiss Financial Services Limited and Nomura Financial Advisory and Securities (India) Private Limited are the book running lead managers to the issue.Ends

Company Information

Five Star Business Finance has a strong presence in south India, and all loans are secured by the borrowers’ property, predominantly being self-occupied residential property (SORP), according to the CRISIL Report, among its peers. FSBFL was set up by V.K Ranganathan and commenced operations in 1984, with a focus on consumer loans and vehicle finance.

The table below shows subscription data for all the categories of investors:

FIVE STAR BUSINESS FINANCE LIMITED Last updated on 10 Nov 2022 | 05:00:00 PM Sr.No. Category No.of shares offered / reserved No. of shares bid for No. of times of total meant for the category 1 Qualified Institutional Buyers (QIBs) 87,11,132 87,69,063 1.01 1(a) Foreign Institutional Investors (FIIs) – 56,65,715 – 1(b) Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) – 28,48,094 – 1(c) Mutual Funds – – – 1(D) Others – 2,55,254 – 2 Non Institutional Investors(NIIS) 65,33,350 1,44,615 0.02 2.1 Non Institutional Investors(Bid amount of more than Ten Lakh Rupees) 43,55,566 66,278 0.02 2.1(a) Corporates – 2,139 – 2.1(b) Individuals (Other than RIIs) – 62,000 – 2.1(c) Others – 2,139 – 2.2 Non Institutional Investors(Bid amount of more than Two Lakh Rupees and upto 10 lakh rupees) 21,77,784 78,337 0.04 2.2(a) Corporates – – – 2.2(b) Individuals (Other than RIIs) – 69,905 – 2.2(c) Others – 8,432 – 3 Retail Individual Investors (RIIs) 1,52,44,484 8,67,566 0.06 3(a) Cut Off – 7,55,160 – 3(b) Price Bids – 1,12,406 – 4 Employee Reserved – – – 4(a) Employee (Cut off) – – – 4(b) Employee (Price) – – – 5 Reservation PortionShareholder – – – 5(a) RPS (Cut off) – – – 5(b) RPS (Price) – – – Total 3,04,88,966 97,81,244 0.32

BSE+ NSE Cumulative Demand link: https://www.bseindia.com/markets/publicIssues/CummDemandSchedule.aspx?id=5927