Small business and mortgage loans provider Five Star Business Finance has raised Rs 588 crore (around $72 million) from 16 anchor investors including Abu Dhabi Investment Authority (ADIA), Fidelity Investments, Capital Research and White Oak, among others ahead of its stock market debut.
The public issue will open for subscription from 9-11 November.
The TPG-backed Five Star Business Finance has decided to allocate 1,24,05,094 (1.24 crore) equity shares to anchor investors at Rs 474 apiece, aggregating the transaction size to Rs 588 crore, according to the company’s statement.
The IPO is purely an offer for sale (OFS) and the shareholders will offload stake to the tune of Rs 1,960 crore. The price band for the offer is Rs 450-474 per share.
The Chennai-based non-banking financial corporation (NBFC) has decided to allocate 90,06,316 (90 lakh) shares to nine foreign portfolio investors (FPIs) for approximately Rs 426.90 crore. The allottees include Capital Research, Fidelity Investments, Abu Dhabi Investment Authority, Norges Bank, Carmignac Gestion, White Oak, Malabar Investments, Bay Capital and Segantii, the statement added.
Domestic mutual funds and other firms Enam, SBI Life Insurance, HDFC Mutual Fund, Baroda BNP Mutual Fund, Edelweiss Mutual Fund, Mirae Mutual Fund and Gee Cee Ventures, also participated in the anchor book.
Companies like ICICI Securities, Edelweiss Financial Services, Kotak Mahindra Capital Company, and Nomura Financial Advisory and Securities (India) are acting as the book-running lead managers (BRLM) for the IPO. KFin Technologies is the registrar of the offer.
Five Star Business Finance provides secured business loans to micro-entrepreneurs and self-employed individuals, each of whom is largely excluded by traditional financing institutions.
As of 30 June 30, 2022, the company has an extensive network of 311 branches spread across approximately 150 districts, eight states and one union territory, with Tamil Nadu, Andhra Pradesh, Telangana and Karnataka being its key states.
In FY22, Five Star Business posted a revenue of Rs 1,254.06 crore in FY22 against Rs 1,049.74 crore in FY21. FY22 gross term loans were at Rs 5,067.07 crore against Rs 4,445.38 crore a year ago and disbursements rose to Rs 1,756.24 crore in FY22 against Rs 1,245.05 crore in FY21.
As of 30 June, 2022, the company's total assets are around Rs 6,471.55 crore.