Five Star Business Finance: PE investors may sell up to 8.8% via block deals

Floor price for Five Star Business Finance block deals will likely be at Rs 724 per share, which is at 6.25 percent discount to current market price (Representative image)

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26 Aug, 2025 12:21

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Private equity investors are likely to sell up to 8.8 percent stake in Five Star Business Finance via block deals, CNBC-TV18 reported on August 31 citing sources.

Sources have said that Matrix Partners, TPG Asia, and Norwest Ventures may also sell stake in the NBFC.

The floor price for the Five Star Business Finance block deals will likely be at Rs 724 per share, which is at 6.25 percent discount to current market price.

The total size of Five Star Business Finance, including base size, would be up to Rs 1,860 crore, according to the report.

Also read: Has FundsIndia’s pivot brought mutual fund distributors back into the limelight?

The non-bank lender logged a 31.8 percent jump in net profit to Rs 183.7 crore for the first quarter of this fiscal. The company’s net profit stood at Rs 139.4 crore in the corresponding period of the previous year FY23.

One of the fastest-growing companies in the segment, Five Star Business Finance provides secured business loans to micro-entrepreneurs and self-employed individuals (secured by self-occupied residential property) with a strong presence in south India.

“Five Star delivered a fourth straight quarter of strong earnings with Q1FY24 PAT growing 32 percent YoY/9 percent QoQ, AUM grew 43 percent YoY/10 percent QoQ…AUM growth is led by branch expansion and increase in average ticket size due to inflation,” Nuvama Institutional Equities said in a note.

Five Star added 75 branches YoY and 13 branches QoQ. Portfolio yield and Cost of Funds remained stable, leading to a stable QoQ spread but net interest margin (NIM) declined sharply by 73 bps due to high leverage.