Five Star Business Finance raises Rs 588 crore from anchor investors

Non-banking financial company Five Star Business Finance Ltd on Monday said it has mobilised Rs 588 crore from anchor investors ahead of its initial public offering (IPO) which will open on Wednesday.

The initial share sale of the lender will conclude on November 11.

The firm has decided to allocate 1.24 crore equity shares to anchor investors at Rs 474 apiece, aggregating the transaction size to Rs 588 crore, according to a circular uploaded on BSE’s website.

SmallCap World Fund, Fidelity Investments, Capital Research, Malabar Investments, Government Pension Fund Global, Abu Dhabi Investment Authority, Norges Bank, Carmignac Gestion, White Oak, Bay Capital, Segantii, SBI Life Insurance, HDFC Mutual Fund (MF), Baroda BNP MF, Edelweiss MF and Mirae MF are among the anchor investors.

The IPO is entirely an offer for sale (OFS) of shares to the tune of Rs 1,960 crore by existing shareholders and promoter group entities.

The Chennai-based NBFC is backed by investors like TPG, Matrix Partners, Norwest Ventures, Sequoia and KKR.

The OFS will see the sale of shares to the tune of Rs 166.74 crore by SCI Investments V, Rs 719.41 crore by Matrix Partners India Investment Holdings II LLC, Rs 12.08 crore by Matrix Partners India Investments II Extension LLC, Rs 361.44 crore by Norwest Venture Partners X- Mauritius and Rs 700.31 crore by TPG Asia VII SF Pte Ltd.

At present, TPG Asia holds a 21.45 per cent stake, Matrix Partners owns 12.67 per cent, Norwest Venture has a 10.17 per cent stake and SCI Investments holds an 8.79 per cent stake in the company.

Investors can bid for a minimum of 31 equity shares and in multiples of 31 equity shares thereafter.

Five Star Business Finance provides secured business loans to micro-entrepreneurs and self-employed individuals, the two segments of borrowers largely excluded by traditional financing institutions.

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