FIVE-STAR BUSINESS FINANCE LIMITED UNLISTED SHARE
FIVE-STAR BUSINESS FINANCE LIMITED is a Non-Banking Finance Company (NBFC), registered with the Reserve Bank of India (RBI). Five Star Business Finance Limited targets the segment which is untouchable by traditional banks and financial institutions. They provide finance to small businesses like small shops, flower vendors, maids, and masons, and also to small & medium enterprises.
Five Star Business Finance Limited provides small business loans to meet borrowers’ requirements for commencing new businesses, expansion of existing businesses, and settling any dues. The company also provides mortgage loans. Generally, the loan ticket ranges between Rs. 1 Lakh to Rs. 10 Lakh, given for a tenure of 2 years to 7 years.
The company focuses more on increasing its customer base to grow rather than on increasing the ticket size of loans. For that purpose, the company is constantly increasing its presence in various states of India. Currently, the company has a network of 262 Branches spread across India.
Credit Rating agency CARE has given a rating of CARE A for the company’s long-term bank facilities.
INCORPORATION DETAILS
|
CIN |
U65991TN1984PLC010844 |
|
Registration Date |
07 May 1984 |
|
Category / Sub-Category of the Company |
Company Limited by Shares |
|
Address of the Registered office and contact details |
New No: 27, Old No: 4, Taylor's Road, Kilpauk, Chennai - 600 010 Phone: 044 – 46106200 |
|
Name, Address and Contact details of Registrar and Transfer Agent, if any |
NSDL Database Management Limited 4th Floor, Trade World, 'A' Wing, Kamala Mills Compound, Lower Parel, Mumbai - 400 013 |
PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
|
Name and Description of main products/services |
% to the total turnover of the Company |
|
Small Business Loans, Home Loans & Mortgage Loans |
65.88% |
BOARD OF DIRECTORS
D Lakshmipathy (Chairman & Managing Director)
A Ramanathan (Independent Director)
R Anand (Independent Director)
Bhama Krishnamurthy (Independent Director)
B Haribabu (Independent Director)
L R Raviprasad (Non-Executive Director)
Vikram Vaidyanathan (Investor Director, Matrix Partners)
Thirulokchand Vasan (Non-Executive Director)
Arjun Saigal (Alternate Director to Mr. Ling Wei Ong)
G V Ravishankar (Investor Director, Sequoia Capital)
Sanjeev Mehra (Investor Director, TPG Group)
PARTICULARS OF SUBSIDIARY AND ASSOCIATE COMPANIES
FIVE-STAR BUSINESS FINANCE LIMITED does not have any subsidiary or associate company.
SHAREHOLDING PATTERN
(As of 31-03-2020)
|
S. No. |
Shareholders’ Name |
No. of Shares |
% of total Shares of the company |
|
1 |
D Lakshmipathy |
37,10,771 |
13.68 |
|
2 |
L Hema |
20,89,060 |
7.70 |
|
3 |
R Deenathayalan |
1,63,200 |
0.60 |
|
4 |
D Varalakshmi |
44,770 |
0.17 |
|
5 |
L Sritha |
20,000 |
0.07 |
|
6 |
Public Shareholding |
2,11,00,090 |
77.78 |
|
|
Total |
2,71,27,891 |
100 |
INDUSTRY OUTLOOK
The COVID-19 pandemic has been significantly severe, to say the least, and every institution across sectors has been impacted by this. More particularly in the financial services industry, every government and central bank across the globe has been taking measures to contain the effects of the pandemic but the results till now have not been very encouraging. The duration of the pandemic remains to be seen and it is unlikely that there would be any major growth during the current financial year i.e. FY 2020-21.
According to ICRA, a rating agency, the NBFC industry is likely to face asset quality pressure in the short term. However, the majority of the NBFC industry will withstand any stress as their collection capacity is improving. Moreover, their balance sheets mention that they are maintaining sufficient liquidity for tackling emergencies.
RBI has announced various measures, as a part of the response to the economic challenge faced by the NBFC industry, to aid the liquidity crisis in the system and to make NBFC work easier. NBFC's role in the loan brokerage business is growing. The default by a large NBFC brought the focus on the asset-liability mismatches of NBFCs, which poses risks to the NBFC sector as well as the financial system as a whole. To cope with this issue, RBI has introduced the Liquidity Coverage Ratio requirement for all types of NBFCs with an asset size of Rs.5000 Crore.
As per the new rule, NBFCs are required to maintain high-quality liquid assets to easily deal with net cash outflow in stressed scenarios. From December 2020, NBFC must reach 100% LCR within 4 years.
NBFC’s business mainly comes from the informal and self-employed sectors, so it will have a significant impact on sales fluctuations due to the congestion and interruption of customer terminals caused by Covid-19.
With technology penetrating the industry, the NBFC industry is expanding its services in innovative ways. NBFC Industry has huge potential in India. At the pan India level, micro-credit reached to not more than 20% of total deserving households through a variety of channels including Banks, small finance banks, and microfinance institutes.
The threat to the industry includes a high level of competition. As Small finance banks mainly focus on this segment, and nowadays commercial banks are also showing active interest in the microcredit industry, the competition has become very intense.
KEY FINANCIALS OF FIVE-STAR BUSINESS FINANCE LIMITED(In Rs. Lakhs)
|
Particulars |
2021 |
2020 |
2019 |
2018 |
|
Interest Income |
1,01,487.58 |
74,682.42 |
38,973.81 |
18,821.16 |
|
Total Revenue from Operations |
1,04,974.22 |
78,671.48 |
40,890.80 |
20,063.29 |
|
EBITDA |
81,150.34 |
57,567.16 |
29,854.14 |
13,417.87 |
|
Finance Cost |
32,519.12 |
21,693.51 |
7,592.20 |
5,698.30 |
|
Depreciation |
1,138.39 |
1,006.85 |
419.46 |
259.43 |
|
Other Income |
151.25 |
63.25 |
1.86 |
1.55 |
|
Profit Before Tax |
47,644.08 |
34,930.05 |
21,844.34 |
7,461.69 |
|
Total Tax |
11,744.64 |
8,735.01 |
6,178.61 |
2,116.72 |
|
Profit After Tax (PAT) |
35,899.44 |
26,195.04 |
15,665.73 |
5,344.97 |
|
PAT margin |
34.15% |
33.27% |
38.31% |
26.64% |
|
EPS (Rs.) |
140.13 |
103.24 |
68.92 |
30.83 |
BALANCE SHEET OF FIVE-STAR BUSINESS FINANCE LIMITED(In Rs. Lakhs)
|
Particulars |
2021 |
2020 |
2019 |
|
ASSETS |
|||
|
FINANCIAL ASSETS |
|||
|
Cash and cash equivalents |
1,35,572.27 |
45,112.89 |
21,972.61 |
|
Loans |
4,35,874.94 |
3,83,080.44 |
2,09,586.40 |
|
Other financial assets |
474.34 |
524.57 |
285.89 |
|
TOTAL FINANCIAL ASSETS |
5,71,921.55 |
4,28,717.90 |
2,31,844.90 |
|
NON-FINANCIAL ASSETS |
|||
|
Tax assets |
4,494.73 |
3,258.42 |
1,824.47 |
|
Tangible assets |
2,301.79 |
2,597.65 |
747.97 |
|
Intangible assets |
190.30 |
192.8 |
201.8 |
|
Other non-financial assets |
452.77 |
548.62 |
363.81 |
|
TOTAL NON-FINANCIAL ASSETS |
7,439.59 |
6,597.49 |
3,138.05 |
|
TOTAL ASSETS |
5,79,361.14 |
4,35,315.39 |
2,34,982.95 |
|
LIABILITIES AND EQUITY |
|||
|
FINANCIAL LIABILITIES |
|||
|
Payables |
867.17 |
662.4 |
292.69 |
|
Debt securities |
1,30,378.55 |
1,07,886.42 |
43,350.77 |
|
Borrowings (other than debt securities) |
2,12,141.12 |
1,28,482.89 |
52,652.18 |
|
Other financial liabilities |
1,717.01 |
1,568.10 |
6.88 |
|
TOTAL FINANCIAL LIABILITIES |
3,45,103.85 |
2,38,599.81 |
96,302.52 |
|
NON FINANCIAL LIABILITIES |
|||
|
Current tax liabilities |
0.00 |
74.8 |
162.17 |
|
Provisions |
719.80 |
577.61 |
376.26 |
|
Other non-financial liabilities |
1,720.27 |
1,605.12 |
1,629.19 |
|
TOTAL NON-FINANCIAL LIABILITIES |
2,440.07 |
2,257.53 |
2,167.62 |
|
TOTAL LIABILITIES |
3,47,543.92 |
2,40,857.34 |
98,470.14 |
|
EQUITY |
|||
|
Equity share capital |
2,564.49 |
2,558.21 |
2,389.96 |
|
Other Equity |
2,29,252.73 |
1,91,899.84 |
1,34,122.85 |
|
TOTAL EQUITY |
2,31,817.22 |
1,94,458.05 |
1,36,512.81 |
|
TOTAL EQUITY AND LIABILITIES |
5,79,361.14 |
4,35,315.39 |
2,34,982.95 |
DIVIDEND HISTORY
|
Particulars |
2020 |
2019 |
2018 |
|
Dividend (In Rs.) (final + interim) |
Nil |
Nil |
Nil |
|
Retained Earnings (Consolidated) (In Rs. Lakhs) |
40,820.92 |
19,976.24 |
7,481.78 |
PERFORMANCE OF THE COMPANY
Five Star Business Finance Limited earned an interest income of Rs. 1,01,487.58lakhs in FY 2021, registering a growth of 35.89% from the interest income of FY 2020 which was Rs. 74,682.42 lakhs.
The company’s total Revenue from Operations increased by 33.4% from Rs. 78,671.48 lakhs in FY 2020 to Rs. 1,04,974.22 lakhs in FY 2021.
The Profit After-tax of the company increased by 37.01% in FY 2021 and reached Rs. 35,899.44 lakhs from Rs. 26,195.04 lakhs in FY 2019. Profit After Tax (PAT) margins increased to 34.15% in FY 2021 from 33.27% in FY 2020.
Five Star Business Finance Limited disbursed a total amount of about Rs. 2,40,867 lakhs, as against Rs 1,48,146 lakhs during the FY 2019 to about 79,000 borrowers. This resulted in an increase in the borrower base from around 73,000 to more than 1,40,000.
As of March 31, 2020, the total loan assets under management increased to Rs 3,89,223 lakhs from Rs 2,11,280 lakhs in FY 2019 registering a growth of 84%.
Total Borrowings (including debt securities) of the company have increased by 44.90% from Rs. 2,36,369.31 lakhs as of 31st March 2020 to Rs. 3,42,519.67 lakhs as of 31st March 2021.
The company’s Gross NPA on 31st March 2020 stood at 1.36%.
Additional equity capital of Rs. 31,500lakhswas infused by TPG Capital in FY 2020.
The company has not given any dividends for the past 3 years. Because of that, the retained earnings of the company jumped from Rs. 7,481 lakhs on 31st March 2018 to Rs. 40,820.92 lakhs on 31st March 2020.
The total book value of the company as of 31st March 2021 was Rs. 2,31,817.22 lakhs. And book value per share of the company on 31st March 2021 was around Rs. 854.53.
The company’s return on equity stood at 15.49% for FY 2021.
The debt-equity ratio of the company for the year ended 31 Mar 2021 is 1.48.
