Five-Star Business Finance zooms 19%, hits highest level since listing

Shares of Five-Star Business Finance Ltd (FSBF) zoomed 19 per cent to Rs 619.50, hitting its highest level since listing, on the BSE on Tuesday. The stock of the non-banking finance (NBFC) made its market debut on November 21. The stock of FSBF is now 31 per cent higher against its issue price of Rs 474 per share. It has also bounced back 38 per cent from its 52-week low of Rs 448.20, touched on the listing day.

FSBF is a NBFC registered with Reserve Bank of India, and has a network of 352 branches catering to around 250,000 active live accounts in Tamil Nadu (including the Union Territory of Puducherry), Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh and Chattisgarh.

The Company primarily offers small loans for business purposes, asset creation and other economic purposes to micro-entrepreneurs, and selfemployed individuals after due underwriting of their cashflows and backed by the collateral of their house property.

During H1FY23 (April-September), FSBF disbursed loans worth Rs 1,371 crore, registering a growth of 100 per cent year on year (YoY). Asset under management (AUM) grew 24 per cent YoY at Rs 5,732 crore. The company’s profit after tax jumped 30 per cent YoY at Rs 284 crore. The company added 52 branches during H1FY23 resulting in a strong branch network of 352 branches.

FSBF’s management said the company had a collection efficiency of 100 per cent for the September quarter and the strong growth in disbursements and collection efficiencies clearly indicates that the company is back to pre-Covid levels in terms of growth, profitability and quality and are poised to build further on this strong growth trajectory.

FSBF is a player with healthy fundamental performance and robust growth in fast growing small business finance market. Analysts at Anand Rathi Share and Stock Brokers said in their IPO note that FSBF has the fastest gross term loan among peers with a strong on-ground collections infrastructure, which led their ability to maintain a robust asset quality and access to diversified and cost effective long term financing.