New Delhi: Non-bank finance company (NBFC) Five Star Business Finance (FSBFL) plans to raise c -ital through an initial sale of shares. She has submitted her draft of the Red Hering Prospectus (DRHP) to the Sebi c -ital market regulator.
The NBFC expects a valuation of more than 3 billion US dollars. Five Star Business Finance is backed by private equity firms such as TPG C -ital, Sequoia, Matrix Partners, Norwest Venture, KKR and TVS C -ital.
According to the DRHP, the company will raise up to Rs 2,751.95 billion through a primary stake sale. The issue is exclusively an offer-for-sale (OFS) in which the promoters and the existing shareholders will surrender their shares.
The promoters and shareholders participating in the OFS include SCI Investments V, Matrix Partners India Investment Holdings, Norwest Ventures Partners X-Mauritius, TPG Asia VII SF PTE, Deendayalan Rangasamy and Varalakshmi Deendayalan.
In March 2021, the Chennai-based Five Star Business had raised -proximately $ 234 million (Rs.1,700 billion) from new and existing investors.
The company has a strong presence in the southern states, especially in Tamil Nadu. From 103 stores in 2017, the company has grown to nearly 260 plus stores in 120 districts in 8 states to date.
The company offers micro-entrepreneurs secured business loans of -proximately Rs 2-10 lakh against the security of owner-occupied homes.
The consolidated portfolio grew at a CAGR of 81 percent in FY16-FY20, while it grew at a moderate pace of 14 percent in FY2021 due to the impact of the Covid-19 pandemic.
FSBFL’s assets under management were Rs 4,445 crore as of March 31, 2021, compared to Rs 3,892 crore as of March 31, 2020. NBFC posted sales growth of 34 percent to Rs 1,051 crore in FY21 while its net income increased 37 percent to Rs 359 crore.
The company has reserved 50 percent of the issue for qualified institutional buyers, while non-institutional investors receive 10 percent of the shares. The remaining 35 percent will be awarded to private bidders.
The company has named ICICI Securities, Edelweiss Financial Services, Kotak Mahindra C -ital Company and Nomura Financial Advisory and Securities (India) as the lead lead managers of the issue, while KFin Technologies is the registrar of the issue.
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