Chennai-based Five Star Business Finance which runs a small ticket business and also functions as a loan provider to middle and small enterprises raised Rs 333 crore as part of its equity funding.
Sequoia Capital India and US-based Norwest Venture Partners invested Rs 135 crore each for 10% stake of the Rs 1300 crore company, reported The Mint.
The Mint report quoted Five Star’s Chief Operating Officer K Rangarajan as saying that the existing investors - Morgan Stanley and Matrix, invested another Rs 61 crore and Rs 2 crore each.
The non-banking financial institution said that it wants to double its loan book to Rs 1,000 crores for the next financial year. The company currently has a customer base of 18,000, spread across 110 branches in South India.
Five Star plans to further expand its footprint across different states in India.
The Hindu Business Line reported that the company will increase the number of branches to 140-145 by the end of the current financial year.
“Five Star plays a very niche role in today’s markets by serving the large multitudes of small enterprises which are typically not catered to, by most formal financial services players. Over the years, we have developed an expertise in assessing their cash flows and in underwriting their credit, while keeping the asset quality intact,” D Lakshmipathy, Chairman and Managing Director, Five Star said in a statement.
“It’s a great pleasure to invite two marquee investors – Norwest and Sequoia as our partners for growth. They, along with our existing investors – Morgan Stanley and Matrix Partners coupled with our 15+ Bank relationships, add tremendous strength to our balance sheet and growth plans, as we aim to emerge as a leading player in the small business and small housing loans segment,” it added.