Login & Signup

  • PreIPO
  • Startup Fund Raising
  • Valuations
  • Equity Restructing

  • Investments
  • Mutual Funds
  • Demat Account
  • Bonds/NCD
  • Insurance
  • Life Insurance
  • Health Insurance
  • Car Insurance
  • Corporates & Business
  • Property Insurance
  • Group Health Insurance
  • Marine Insurance

RATING

RECOMMENDATION

Strong Buy

  • Portfolio

  • Basket

  • Watchlist

  • More

RATING

RECOMMENDATION

Strong Buy

Business Type

Emerging Leader

  • Five Star Unlisted Shares Essentials

Discover and get complete analysis on Five Star upcoming IPO unlisted shares - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and latest updates.

ISIN

INE128S01013

Face Value

₹10.00

Total Share

2,70,00,000

Total Income

₹787.34 Cr

Profile After Tax

₹262.27 Cr

Promoter Holding

₹22.20 %

EPS

₹103.20

Book Value

₹610.00 Cr

Sector

Financials

Sub-sector

Consumer Finance

Category

Upcoming IPO

Cashflow - Operations

-₹1,523.00 Cr

Cashflow - Financing

₹1,725.00 Cr

Five Star Growth

Compounded Sales Growth

  • 92.50%

    1 Year

  • 108.39%

    3 Year

  • 101.25%

    4 Year

Pro Only

Compounded Profit Growth

  • 67.26%

    1 Year

  • 137.25%

    3 Year

  • 110.97%

    4 Year

Pro Only

Return On Equity

  • 15.85%

    1 Year

  • 13.17%

    3 Year

  • 12.50%

    4 Year

Pro Only

About Five Star

Overview:
  • Five Star is a non-banking finance company (NBFC) with the Reserve Bank of India (RBI), it was formed in 1982 and is specialized in providing financial services to address the needs of unbanked, and unserved segment, funding the people who were perceived to be non-fundable.
  • Key facts: Five-Star Business Finance Limited provides financial services that include business, housing, and mortgage loans. It offers long tenure loans, cashflow based appraisal, transaction options, and documentation services. 
  • Five-Star Business Finance Limited was formerly known as Five Star Business Credits Limited and changed its name to Five-Star Business Finance Limited in July 2016. The company was incorporated in 1984 and is based in Chennai, India.
  • The Chennai-headquartered NBFC, has 262 branches across eight states in the southern and central part of the country.
  • The company has one wholly-owned subsidiary called Five-Star Housing Finance Private Limited which was incorporated on 28th September 2015, registered with the National Housing Bank (NHB) as a non-deposit taking Housing Finance Company (HFC).


Key managerial personnel of the company:  

  • Mr. D Lakshmipathy, Chairman and Managing Director
  • Mr. K Rangarajan, Chief Executive Officer
  • Mr. G Srikanth, Chief Financial Officer


Key client base:
  • The focus area of the company is to strike its operations to more and more under-served, self-employed &small business customers and help them access credit on reasonable terms by opening a greater number of branches in the semi-urban/rural areas.
  • The customers include all the way from small shop owners, flower vendors, maids, masons to small and medium enterprises that form the backbone of India’s economy.
  • The company maintains healthy lending relationships with
  • Major banks such as Andhra Bank, Bandhan Bank, Capital Small Finance bank, Federal Bank, HDFC Bank etc.
  • Major NBFCs such as Aditya Birla Finance, Tata Capital, Hinduja Leyland Finance, Sundaram Finance etc.
  • The company has its branches in Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Telangana, Andhra Pradesh, Tamil Nadu, Karnataka etc.

  • Five Star IPO Details

Company is planning to come up with IPO in FY-2022, 12-18 months from the current year

  • Five Star Funding

  • Five Star Revenue Segmentation

  • Small Business Loans, Home loans and mortgage loans
  • Five Star Product & Services

Business Loans
  • Loans provided to borrowers for furthering their existing businesses, starting new businesses
Mortgage Loans
  • Loans provided for takeover from other institutions, to meet family needs like education requirements, medical emergencies.
  • Five Star Industry Overview

Industry Statistics

  • Financial services in India consists of commercial banks, insurance companies, non-banking financial corporations, cooperatives, pension funds, mutual funds and other smaller financial institutions.
  • NBFC lenders currently account for around 20.0%of the sector’s credit needs, clocking a CAGR of 30% over the last five years.
  • As a critical part of India’s financial system, NBFCs have been driving credit inclusion among individuals and enterprises by improving access and bridging pricing inefficiency through innovative product solutions and delivery models.
  • Today, non-bank lenders(includes both NBFCs and HFCs) constitute about 25.0% (over Rs. 36 Lakh Cr.) of the systemic credit outstanding and have financed over 10 Cr. customers drawing strength from their extensive footprint largely in rural and semi-urban areas (70.0% of total branches).
  • In a survey, ICRA revealed that more housing finance companies (HFCs) expect growth of over 10.0% as compared to NBFCs. Also, smaller and mid-sized entities with an AUM of under Rs 20,000 Cr. expect higher growth rate compared to their larger peers.
  • The key levers driving growth in housing finance include urbanization, housing shortage, fall in average household size, rising affordability and lower penetration in rural/ semi-urban areas.
  • Credit accessibility in India remains comparatively lower against developed nations and other BRIC economies. This is evident from the credit to GDP ratio for India which stands at 58.0% compared to 150.0% and 205.0% in the US and China respectively.
  • Mortgage to GDP ratio in India is low at 10.0%, which is a significant opportunity to bridge the gap in India’s credit 

Five Star Strengths

  • In FY20, EBITDA of the company has increased by 93.0% as compared to that in FY19. The total loan assets under management increased to Rs  3,892 Cr. in FY20, from Rs 2,113 Cr. during the previous financial year registering a growth of 84.2%.
  • Despite the significant downturns in the economy especially the financial services industry, the company managed to retain its rating of A stable from both ICRA and CARE Ratings.
  • Company has maintained a healthy operational efficiency in the difficult times such as net profits have increased at a CAGR of 120.3% since FY18 along with a CAGR of 98.1% in revenue since FY18.The overall branch count increased from 173 in FY 2019 to 252 in FY 2020 registering a growth of about 46.0% and continues to be on the same line in near term future.
  • Five Star continues to diversify geographically, thereby mitigating the risk of concentrated portfolio in one geography.
  • The company had a very healthy leverage for the period ended March 31, 2020 at 1.21x, on account of robust internal accruals and the follow-on equity infusion by TPG Capital and continues to be on the same line in near term future.

Five Star Shortcomings

  • Company’s ROA has decreased from 8.9% in 2019 to 7.8% in 2020.
  • PBT margin of the company has decreased from 53.4% in 2019 to 44.4% in 2020.
  • In the FY20, the company’s ratio of gross NPAs to net advances has risen from 0.9% in 2019 to 1.4% in 2020 along with net NPAs to net advances has risen from 0.7% in 2019 to 1.1% in 2020.

Five Star Opportunities

  • The state of Madhya Pradesh witnessed significant branch growth from 7 in FY19 to 26 in the FY20. Madhya Pradesh is expected to be launchpad of the company, to enhance its presence in central and northern regions of the country in coming times.
  • In July 2019, an additional equity capital of Rs. 315 Cr. was infused by TPG Capital, reinforcing their confidence in the company. TPG Capital had also invested significant money into the company in the FY19.
  • In order to bring about customer convenience, the company has facilitated payment of instalments through digital means like UPI, payment through the company’s website, etc. This would enhance the levels of technology towards enhanced and proactive identification of risks and mitigating them in the best manner possible.

Five Star Threats

  • As per the Financial Stability Report of RBI, the GNPA of NBFCs increased from 6.1% in FY19 to 6.4% in FY20. The asset quality is also expected to worsen even further in FY21 given the widespread damage caused by the pandemic.
  • Recently applicability of liquidity coverage ratio (LCR) was imposed on NBFCs by RBI. Such frequent changes in regulatory framework poses challenges on day-to-day operations of the NBFCs.
  • The outbreak of COVID-19 has further disrupted the existing stress in the Indian financial system due to significant drop in customer acquisition, sharp fall in customer repayments/collections and liquidity stress emanating from increased risk aversion by banks.
  • The housing sector sales have been impacted since FY17 with the implementation of RERA and similar macro events which led to fewer launches and muted demand. This is further accentuated with the liquidity crisis faced by non-bank lenders.
  • Since FY19, non-bank lenders have been increasingly challenged for growth on account of liquidity crisis in the sector. The key factors which have exposed them to growth challenges include difficulty in rolling over existing debt and raising new debt due to liquidity squeeze.
Five Star Rating

  • RECOMMENDATION

    Strong Buy

  • Five Star Detail Info

Industry Statistics

PRIVATE LIMITED

Registered In

India

last Updated

22/04/2021

Registered Date

05/07/1984

Stock Exchange Ticker

FSBF

Reg Office: New No 27, Old No 4 Taylor's Road, Kilpauk - 600010 Chennai, India

Website: http://www.fivestargroup.in