Five Star Business Finance IPO analysis @ Chanakyanipothi.com
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Five Star Business Finance Grey Market News Today #
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Five Star Business Finance IPO Subscription Status

# On 11 November 2022 @ 5.00 pm (Last Day)
QIB        :     8711132    Shares,  1.77T
Big NII   :     4355566    Shares,  0.78T
SmallNII:     2177784     Shares,  0.28T
RII         :      15244484   Shares, 0.11T
Total      :     30488966   Shares,  0.70T

Five Star Business Finance IPO Guidance: The company has routine finance and micro finance related business and nothing unique. It is highly crowded market with competition from many large corporates. The company is based at Chennai with a strong presence in South India. The shares are offered at PE Multiple of 29.45, and very small portion is left on the table for the new investors. The fancy in the grey market is not very strong. You may avoid this IPO.

Five Star Business Finance Company Details
Five Star Business finance 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 and all of its loans are secured by the borrowers’ property, predominantly being SORP. According to the CRISIL Report, among its compared peers:
• within a subset of large peers (with more than Rs 30,000 million in AUM), it is the fastest AUM growth, with a compound annual growth rate (“CAGR”) of 65.0% (Financial Year 2017 to 2021) ;
• within a subset of large peers (with more than Rs 30,000 million in AUM), it was the highest average return on AUM of 7.9%, across the period covering Financial Years 2021, 2020 and 2019; and
• it is among the three best for Gross Non-Performing Assets as a percentage of AUM (it had a Gross NPA as a percentage of AUM of 1.02%) as of March 31, 2021, while it has the best asset quality among lenders identified by CRISIL as engaged in extending MSME business loans, with other lenders reporting 90+ DPD in excess of 2%

Over 95% of its loan portfolio comprises loans from between Rs 1 lac to Rs 10 lac in principal amount, with an average ticket size (“ATS” and calculated as the average disbursed sum per customer during the period/year) of Rs 2.70 lac, Rs 2.60 lac, Rs 3.01 lac and Rs. 3.40 lac in the six months ended September 30, 2021, and the Financial Years 2021, 2020 and 2019, respectively. It had an active loan base of 192,270 and 176,467 as of September 30, 2021, and March 31, 2021, respectively. Our AUM has grown to Rs 46,39.29 Cr as of September 30, 2021, from Rs 4,93.59 Cr as of March 31, 2017, at a CAGR of 65% between financial year 2017 and six months ended September 30, 2021.
For more information, click www.fivestargroup.in

The Promoters of Five Star Business Finance
Lakshmipathiy Deenadayalan, Hema Lakshmipathy, Shritha Lakshmipathy, Matrix Partners India Investment Holdings II LLC & SCI Investments V

Five Star Business Finance IPO Main Objects
The Offer comprises only of Offer for Sale.

Five Star Business Finance IPO Details
IPO opens on 9 November 2022
IPO closes on 11 November 2022
Issue Type: Book Built Issue IPO
Issue: up to 41351266 Shares /Rs 1960.05 Cr
* Offer for Sale Up to 41351266 Shares/ Rs. 1960.05 Cr

Face Value per share : Rs. 1

Five Star Business Finance IPO Price Band Per Equity Share: Rs. 450-474
Five Star Business Finance IPO Retail Lot Size 31 Shares
Five Star Business Finance Listing will at BSE, NSE

Shares offered to
QIB (50%) 2067563  Shares = Rs 980.03 Cr
NII (15%)  6202690  Shares = Rs 294.00 Cr
RII (35%)  14472943 Shares = Rs 686.02 Cr
Lot size: 31 Shares = 466869 Forms
How can you apply?
Retail (Min)             31 Shares  Rs. 14694
Retail (Max)          403 Shares  Rs. 191022
Small HNI (Min)   434 Shares   Rs. 205716
Big HNI (Min)     2139 Shares   Rs. 1013886

Five Star Business Finance IPO Tentative timetable
IPO opens on                     9 November 2022
IPO Closes on                   11 November 2022
IPO Allotment on              17 November 2022
Unblocking of ASBA          18 November 2022
Credit of shares                 18 November 2022
Data Patterns Listing on    21 November 2022

Five Star Business Finance IPO Financial & Analytical Ratios
Earnings per Share 2019-20  Rs 10.32
Earnings per Share 2020-21  Rs 14.01
Earnings per Share 2021-22  Rs 16.09
Book Value of the Share as on 31.3.2022 Rs 127.35
Return on Net Worth: 19-20 15.35 %
Return on Net Worth: 20-21: 16.85 %
Return on Net Worth: 20-21: 13.86 %
Equity Shares prior to the IPO: 290,135,120 Shares

Ratio Analysis
Upper Price Band/last EPS: 29.45
Upper offer price/Book Value Ratio 3.72
Upper offer price/BV after IPO Ratio:

Five Star Business Finance IPO Peer Comparison:
Five Star Business @ PE Multiple of 29.45
Aavas Financiers  @ PE Multiple of 46.02
Aptus Value         @ PE Multiple of 43.29
Au Small Finance @ PE Multiple of 33.19

Five Star Business Finance IPO Lead Managers
ICICI Securities, Edelweiss Financial Services, Kotak Mahindra Capital, Nomura Financial Advisory.
Registrar to Five Star Business Finance IPO
Kfin Technologies Pvt ltd.

Registered Office of Five Star Business Finance
New No. 27, Old No. 4, Taylor’s Road, Kilpauk, Chennai 600 010,
Company Secretary & Compliance Officer: Shalini Baskaran

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