Five-Star Business shares slip 9% as AUM guidance cut disappoints Street

Shares of the company have tanked 14 percent in the past month.

Shares of Five-Star Business Financed extended their decline on October 31, sliding another 9 percent to Rs 698 after a 13 percent drop on October 30. The two-day fall has brought the stock down by nearly 19 percent, despite the company’s strong quarterly performance for the September period.

The sell-off began Wednesday when the company, in its earnings call, revised its Assets Under Management (AUM) growth outlook down to 25 percent, a reduction from the earlier target of 30 percent.

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For Q2 FY2024, Five-Star Business Finance reported a 32.2 percent year-on-year growth in AUM, reaching Rs 10,927 crore. Asset quality showed mixed results, with Gross NPA increasing to 1.47 percent from 1.41 percent in June, while Net NPA rose to 0.71 percent from 0.68 percent. Provisions surged to Rs 21.8 crore, doubling year-over-year and marking a 17.5 percent sequential increase.

Last month, as much as an 11.20 percent stake of Five Star Business Finance was sold through block deals worth Rs 2,034.60 crore on September 26 with Peak XV, other PE investors being the likely sellers in the transaction.

At about 2:09 pm, Five-Star Business shares were trading at Rs 708, lower by 7.5 percent from the last close on the NSE. Shares of the company have tanked 14 percent in the past month.