On November 9, Five Star Company Finance, which provides small business loans and home loans to microentrepreneurs and self-employed persons, will launch its initial public offering.
Here are some crucial facts concerning the issue:
1. Dates of IPO, allotment, and listing
The issue will be released on November 9th (Wednesday). The deadline for subscriptions is November 11th (Friday).2. Price range
3. Provide specifics
The promoters and current shareholders of the firm have made an offer to sell 4.1 crore shares for Rs 1960 crore.
SCI Investments V contributed Rs 166.74 crore in equity shares, Matrix Partners India Investment Holdings II, LLC contributed Rs 719.4 crore, Matrix Partners India Investments II Extension, LLC contributed Rs 12.08 crore, Norwest Venture Partners X - Mauritius contributed Rs 361.4 crore, and TPG Asia VII SF Pte. Ltd contributed Rs 700.3 crore.4. The issue's objectives
According to the Red Herring Prospectus, the selling shareholders will be entitled to their respective part of the proceeds from the OFS after deducting their proportionate share of connected expenditures and any taxes. The OFS will not generate any revenue for the firm.
5th. Lot Size
Investors can place bids for a minimum lot size of 31 shares and multiples of that amount. A retail investor's minimum investment is Rs 14,694 at the higher end of the pricing band for 31 shares.
6. Company and industry information
The organisation, based in Chennai, offers secured business loans to micro-entrepreneurs and self-employed persons who are often overlooked by traditional lending institutions. Its loans are all secured by borrowers' property (SORP).or a self-contained residential property
As of June 30, 2022, it had 311 branches distributed throughout 150 districts in eight states, with the primary markets being Tamil Nadu, Andhra Pradesh, Telangana, and Karnataka.
Over 95% of its loan portfolio consists of loans ranging in principle amount from Rs 1 lakh to Rs 10 lakh, with an average ticket size of Rs 2.9 lakh.
7. Finances
Total income climbed by 12.74 percent to Rs 339.05 crore for the three months ending June 30, 2022, up from Rs 300.75 crore for the same period in the previous year. During the same time period, profit after tax climbed by 37.28 percent to Rs 139.43 crore.
As of March 31, 2022, the asset under management amounted at Rs 5100 crore, compared toas of March 31, 2021, to Rs 4400 crore According to CRISIL, it had the fourth quickest AUM growth of 50 percent CAGR over fiscal 2018-22 among peers.
8. Advantages and disadvantages
According to Choice Broking analysts, the Five Star's strengths include its ability to effectively grow into new underserved countries, solid on-the-ground collections infrastructure, in-house sourcing, comprehensive risk management, and good asset quality.
Meanwhile, the company's main problem is that it works in a very competitive market. Some of its rivals are Shriram City Union Finance, Vistaar Financial Services, Veritas Financial and Management Services, Lendingkart Technologies, Digikredit Finance, AU Small Finance Bank, Aavas Financiers, and Aptus Value Housing Finance.
9. Personnel from key management positions
The Chairman and Managing Director is Lakshmipathy Deenadayalan.of the business
Rangarajan Krishnan is the CEO and a postgraduate in management from the Indian School of Business in Hyderabad. He has worked previously with The World Bank, HDFC Bank, Spark Capital, and Standard Chartered Bank India. He began working with Five Star in August of 2015.
Srikanth Gopalakrishnan, the CFO, joined the company in October 2015. He formerly worked with Citibank India and Asirvad Microfinance.
10. Grey Market, allotment, and listing deadlines
Today's IPO grey market premium (GMP) is Rs 12 per share, which is Rs 2 more than the previous day's GMP of Rs 10 per equity share.
The tentative share allotment date is November 16, and the listing date is November 21.
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