Incorporated in 1984, Five Star Business Finance is a non-banking finance company (NBFC) which provides secured business loans to micro-entrepreneurs and self-employed individuals.
The issue is entirely an offer for sale (OFS) by the promoters and existing shareholders of the company, aggregating to Rs 1,960 crore. The south India-based shadow lender has trimmed its issue size from Rs 2,752 crore.
SCI Investments, Matrix Partners India Investment Holdings and Norwest Venture Partners are the key shareholders participating in the OFS of the company.
Investors can make a bid of a minimum of 31 equity shares and then in multiples thereof. The issue will close for subscription on Friday, November 11, whereas the anchor book will open on Monday, November 7.
The company will not receive any proceeds from the issue and all such proceeds will go to the selling shareholders, who will get a partial or complete exit after this IPO.
Five Star Business Finance has created a business model based on identifying an appropriate risk framework and the ideal instalment-to-income ratio to make sure that customers have the resources to repay the loan.
The company has an extensive network of 311 branches, spread across eight states and one union territory and about 150 districts across India, with Tamil Nadu, Andhra Pradesh, Telangana and Karnataka being the key states.
With more than Rs 3000 crore in assets under management (AUM), the Chennai-headquartered company has the fastest AUM growth among peers.
50% of the allocation has been fixed for qualified institutional buyers, whereas non-institutional buyers will get 15% of shares. The remaining 35% of shares have been allocated to retail bidders.
, , Capital Company and Nomura Financial Advisory and Securities (India) are the managers to the issue, whereas KFin Technologies has been appointed as the registrar to the issue.