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All you need to know about
FIVE STAR BUSINESS FINANCE LIMITED
Issue Details
Issue Amount : ` 1,940 crore
Post Issue Implied Market Cap: ` 13,811 Crore
Total shares for sale : Upto 40,928,268 Equity shares
Face Value : 1 per share
Price Band : `450 to `474
Lot Size : 31 shares
Registrar : KFin Technologies Ltd
Source : BRLM

Offer Breakup

Issue size No. of Shares Issue size

Category Allocation
Lower Band Upper Band (in ` Cr)

QIB 50% 21,333,333 20,253,164 960.0

NIB 15% 6,533,333 6,202,531 294.0

Retail 35% 15,244,444 14,472,573 686.0

Total 100% 43,111,110 40,928,268 1940.0

Source : BRLM
.
IPO timeline `
Issue opens on: `

09
Wednesday, November 09th, 2022

Issue closes on:

Friday, November 11th, 2022 NOVEMBER

16 Finalization of 17 Refunds/Unblocking
Nov 2022 basis of allotment Nov 2022 ASBA fund

18 Credit of equity 21 Trading

Nov 2022 shares to DP account Nov 2022 commences

Source - BRLM. Dates are tentative

The objective of the offer

The objects of the Offer are to to carry out the offer for
sale and achieve the benefits of listing the equity
shares on the stock exchanges. The company will not
receive any proceeds from the offer and all proceeds
will go to the selling shareholders (net of any
offer-related expenses to be borne by the selling
shareholders).

Source - RHP
About the company
It is an NBFC-ND-SI, providing secured business loans to micro-entrepreneurs and
self-employed individuals, each of whom are largely excluded by traditional financing
institutions. It is headquartered in Chennai, Tamil Nadu with a strong presence in South
India. All the loans are secured by its borrowers’ properties, predominantly being SORP. Over
95% of its loan portfolio comprises of loans between ₹0.1 million to ₹1.0 million in principal
amount, with an average ticket size (“ATS” and calculated as the average disbursed sum per
customer during the period/year) of ₹0.29 million, ₹0.27 million, ₹0.28 million, ₹0.26 million
and ₹0.31 million in the three months ended June 30, 2022 and June 30, 2021, and the
Financial Years 2022, 2021 and 2020, respectively.

It has developed a business model that is predicated on arriving at an appropriate risk

framework, with the optimal installment to income ratio to ensure that its customers have
the necessary means to repay the loan after meeting their regular obligations and other
event-based capital requirements. It has an extensive network of 311 branches, as of June
30, 2022, spread across approximately 150 districts, 8 states and one union territory, with
Tamil Nadu, Andhra Pradesh, Telangana and Karnataka being its key states. These key
states collectively accounted for approximately 85% of the branch network by magnitude, as
of June 30, 2022. It started its operations in Chennai, Tamil Nadu and has increased the
scale of its operations through growth in number of branches by adopting a calibrated
strategy of contiguous expansion across geographies where there is substantial demand for
the offering. Such contiguous expansion is underpinned by utilizing neighboring branches to
evaluate local credit environments combined with its focus on hiring local staff with an
understanding of the catchment area, strong local personal and professional networks and
the market.

Source : RHP
Strengths

Fastest gross term loans Strong on-ground

growth among other peers. collections infrastructure
leading to maintaining a
robust asset quality.

Ability to successfully expand Experienced, cycle-tested

to new underpenetrated leadership with an
geographies through a experienced, long-standing
calibrated expansion strategy. promoter.

Source : RHP

Risks

` `
`

Substantial capital required to run The risk of non-payment or

business and operations. Should default by borrowers.
any disruption occur in the source
of capital, it can adversely affect
the business.

Inability to meet obligations, Deterioration in the

including financial & other performance of any pool
covenants under their debt of receivables securitized
financing arrangements. to banks and other
institutions.

Source : RHP
Important Financials Data
For the year/period ended (₹ in Crore)

Particulars As at As at As at As at As at
(`, in crore) June 30, June 30, March 31, March 31, March 31,
2022 2021 2022 2021 2020

Total Assets 6471.55 6129.10 6343.07 5793.61 4353.15

Revenue from
Operations 337.97 300.51 1254.06 1049.74 786.71

Revenue Growth
(%) 12.46 NA 19.46 33.43 NA

EBITDA
254.58 224.37 917.05 813.02 576.30

Net Profit for

the period
139.43 101.57 453.54 358.99 261.95

Basic EPS (Rs ) 4.79 3.80 16.09 14.01 10.32

FYXX

RONW (%) 3.69 - 13.86 16.85 15.35

Source : RHP/BRLM.
Peer Comparison
Following is the comparison with its peer group companies listed in India and in the same line of business as the company:

Face Value Closing Total EPS (₹) NAV per P/E P/B RoNW
Name of (₹ Per price on Income, share (₹)
Company hare) October 20, for Financial
2022 (₹) Year 202
(in ₹ million) Basic Diluted

Five-Star
Business
Finance Limited 1 NA 12,561.69 16.09 15.92 127.35 [.] [.] 13.86

Peer Comparison

Aavas
Financiers 10 2,062.30 13,056.48 45.10 44.81 355.53 46.02 5.80 12.66
Limited

Aptus Value
Housing 2 326.00 8,402.17 7.58 7.53 58.68 43.29 5.56 12.69
Finance Limited

Au Small
Finance Bank 10 592.25 69,154.25 18.03 17.85 119.31 33.19 4.96 15.04
Limited
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For more details refer offer documents on sebi www.sebi.gov.in

The securities quoted are exemplary and are not recommendatory. Such representations are not indicative of future results.
Source of statistical information, charts, graphs etc – RHP, DRHP, addendum and Moneycontrol.

Investments in securities market are subject to market risks, please read all the related documents carefully before investing.
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