Five Star Business Finance Limited, a Chennai-based non-banking financing company has bagged $50 million (approx ₹345 crore) in a funding round led by TPG Capital.
After this round, the company’s valuation reaches $950 million.
“Five Star’s approach is laser focussed on providing small business loans to underserved customers. Our strong management team has driven rapid growth after building a robust foundation. With an acute focus on profitability and asset quality, we’ve created a scalable business model recognised by all of our investors and debt partners. Our vision is to double our AUM this year with continued asset quality to build towards IPO scale and look forward to continued support from our partners,” Lakshmipathy, Chairman and Managing Director, Five Star, said.
Five Star, the Chennai based non-banking finance company provides appropriate credit solutions to the hitherto unreached segment of the market by developing a niche underwriting model, built towards evaluating the twin strengths of the borrowers’ intention to repay and ability to repay, with the ultimate objectives of increasing customer satisfaction and maximising stakeholder returns
The company said that it specialises in small business loans to underserved SMEs and micro-SMEs in Tier III-VI cities and towns. The company currently has about 200 branches spread across eight states in India.
“We’re privileged to be Lakshmipathy and Five Star’s first investor and have a ringside seat to their amazing growth journey. Their focussed product approach, critical underwriting process, profitability focus, and relentless execution has made them the market leader in their segment. We believe in their vision of creating a financial services institution with IPO scale and wish them godspeed on the journey ahead,” Vikram Vaidyanathan, Managing Director, Matrix India, said.
Matrix Partners India is the premier investor of the company, along with existing investors Norwest Venture Partners, Sequoia and Morgan Stanley.
Further, its current portfolio stands at about Rs 2,500 crores, with gross NPAs (Non-Performing Assets) standing at less than one percent. While, the company eyes to have a portfolio of ₹4,000 crore by the end of 2019.
Besides, Five Star, there are several other non-banking finance firms which includes InCred Finance, Capital Float, Bank Bazaar, NeoGrowth, and many more.