PE Investors, Including Peak XV To Likely Offload 11.2% Stake Worth ₹2,034 Crore

Five-Star Business Finance stock price was on an up note on Thursday, September 26, as the scrip surged by up to 3.78% during the day to hit an intra-day high of ₹847.45 per share.

Shares of the firm reached the day's high at 10:23 AM IST and was trading at 0.32% higher at ₹811 per share. At the same time, BSE Sensex was trading 0.27% higher at levels of 85,403.52.

The stock price of Five-Star Business Finance jumped with 28.1 million shares traded in a block deal. According to BSE data, 2,81,04,950 equity shares of the company were traded in the block deal at ₹800.50. The value is estimated at ₹2,249.80 crore.

The parties to the deal could not be ascertained. CNBC-TV18 had reported on 25 Sep that private equity investors, including Peak XV Partners, had been looking to sell a stake of up to 20% in Five Star Business Finance through block deals worth around $500 million.

Five-Star Business Finance has a firm market capitalization at ₹23,719.83 crore according to BSE. It has 500 BSE500 categories. The 52-week high of Five-Star Business Finance was ₹860 per share and 52-week low of ₹601 apiece.

According to various reports, TPG Asia, Norwest Venture Partners, and Peak XV Partners (previously Sequoia Capital) might have sold some shares of Five Star Business Finance. Until quarter-ending June, TPG Asia held 9.28%, Norwest Venture Partners had 5.16% while Peak XV Partners held 3.77%. According to the data on the exchanges, at the end of June quarter, Peak XV Partners held a 6.25 percent stake in the NBFC.

Late last year, Five Star Business Finance shareholders TPG Asia VII SF Pte, Matrix Partners India Investment Holdings II LLC, and Peak XV Partners Investments V had sold the shares of the company to rake in ₹1,656 crore through open market deals.

Earlier last month, in September 2023, Norwest Venture Partners X Mauritius, Matrix Partners India Investment Holdings II LLC, and TPG Asia VII SF Pte. had also sold 2.55 crore shares of Five Star Business Finance for ₹1,863 crore.

Five-Star Business Finance Limited is an NBFC that accepts no deposit and caters to loans for various needs, mainly catering to business requirements, home renovation, and other mortgage activities.

Its specific loans include for small businesses and micro-enterprises, that is, operational requirements and asset creation as well as mortgage loans for personal activities like home improvement and significant life events that include education and marriage. The amount ranges from ₹1 lakh to ₹10 lakh, with tenures as long as seven years, with repayments falling due every month as a what is called equated instalment.

Eligibility is created through thorough underwriting of cash flows since loans are collateralized by the collateral from the property owned by the borrower's house.

The loans source primarily is through house efforts, using local marketing, repeat customers and walk-in clients, efficiently catering to various financial requirements and promoting economic activity among individuals and small businesses.