Fidelity, HDFC Mutual Intends To Subscribe Five Star’s IPO


According to the sources, Five Star Business Finance, an Indian non-banking finance company (NBFC), is set to make its stock market debut in the coming weeks, with anchor investors such as Fidelity Investments in talks to subscribe to the issue at a valuation that is 27 per cent lower than the company’s last fund raise.
Backed by US investors such as KKR & Co and Sequoia Capital, the NBFC caters to small businesses in India market.

Five Star received regulatory approval for the $267 million IPO in January, hoping to list soon, but global stock market weakness and rising interest rates delayed its plans, according to the sources.

Fidelity and India’s HDFC Mutual Fund are in talks with Five Star to invest in the IPO’s so-called anchor book, but at a firm valuation of 160 billion rupees due to negative market sentiment.

TPG, Matrix Partners, and Norwest Venture Partners are among Five Star’s other investors. According to its website, it currently has a total loan book of over $480 million and 250 branches, with loans ranging from $1200 to $8500.

According to its annual report, Five Star made a net profit of 4.5 billion Indian rupees ($55.14 million) on a total income of 12.5 billion Indian rupees ($152.74 million) for the fiscal year ending March 2022, up about 20% year on year.

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