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IPO

NBFC Five Star Business Finance set for Rs.2,900-Cr IPO

Mint  

Non-banking financial company (NBFC) Five Star Business Finance Ltd, backed by private equity firms Sequoia Capital and KKR, is readying to file draft papers for an initial public offering (IPO). The Chennai-headquartered small business lender plans to raise USD 400 million (more than INR 2,900 crore) through the public listing. Five Star has mandated Edelweiss, Nomura and Kotak Securities as the bankers with ICICI Securities as the lead merchant banker to run the IPO process. The IPO, likely in the next few months, will also see partial exits of private equity shareholders Matrix Partners India and TPG Asia. As of March end 2021, TPG Asia held almost 22.5%, and Matrix Partners India owned more than 15%. Morgan Stanley's NHPEA Chocolate Holdings B.V.'s stake was around 13.2%. Sequoia Capital and Norwest Venture Partners owned 9.45% stake each in Five Star Business Finance. In March this year, Five Star Business Finance had raised USD 234 million (INR 1,700 crore) from new and existing investors at a valuation of USD 1.4 billion (INR 10,300 crore). The funding round was led by Sequoia Capital India, with participation from Norwest Venture Partners and new investors such as KKR and TVS Capital. Five Star's assets under management (AUM) were INR 4,445.38 crore as of March end.