Five-Star Business Finance Limited is a non-deposit taking, non-banking finance company (NBFC) that has established itself as one of the fastest-growing NBFCs in South India with a 20.5% CAGR between FY20-FY24. The company was incorporated as a Private Limited Company under the name Five-Star Business Credits Private Limited at Chennai, Tamil Nadu on May 7, 1984, converted to a Public Limited Company on October 3, 1988, and subsequently changed its name to Five-Star Business Finance Limited on May 13, 2016.
The company is primarily engaged in providing loans for business purposes, house renovation/extension purposes, and other mortgage purposes. It provides small business loans and small mortgage loans to eligible borrowers to meet their business and personal needs, after due underwriting of their cashflows and backed by the collateral of their house property. The company provides secured loans to micro-entrepreneurs and self-employed individuals for business purposes, as well as for asset creation, such as home renovation or improvement, or for meeting expenses for economic events, such as marriage, and education.
It operates in the states of Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, Madhya Pradesh, Maharashtra, Chhattisgarh, Uttar Pradesh, and Rajasthan. The company has increased its branch presence to 748 branches across 11 states/UT as of March 2025, demonstrating its expanding geographical footprint.
Five-Star Business Finance has a market capitalization of ₹22,866 Crore as of recent data. The company has shown robust financial performance with a profit after tax of ₹1,073 Crore for FY25, representing a 28% increase. The company has an operating revenue of ₹2,847.84 Crore on a trailing 12-month basis with an annual revenue growth of 31% which is outstanding.
- Profit After Tax: ₹1,073 Crore (28% increase)
- Operating Revenue: ₹2,847.84 Crore
- Pre-tax margin: 50%
- ROE: 17%
- ROA: 8.04%
- Standalone net sales of ₹752.27 Crore for March 2025, up 22.06% YoY.
- Net profit rose 18.24% to ₹279.12 Crore.
- EPS improved to ₹9.49 from ₹8.07 in the previous year.
AUM as of March 31, 2025, ended at ₹11,877 Crore, a growth of 23% on YoY basis and 6% on QoQ basis. AUM is well distributed across 0.46 million active loans. The company has been strategically managing its growth trajectory, with management trimming its growth guidance for AUM to 25% from 30% earlier to maintain asset quality.
The company recommended a ₹2 dividend per share for FY25, reflecting strong financial performance. The record date for determining members eligible to receive the final dividend for FY25 has been fixed as Thursday, August 14, 2025. Promoter holding stands at 21.5% as of recent data.
The company maintains strong asset quality metrics with collection efficiency for the quarter at 97.7% and unique customer collection efficiency at 96.2%. ECL provision carried on books was ₹193 Crore (excluding ECL maintained on inter-corporate deposits), which translates to 1.63% of the overall AUM.
Five-Star Business Finance Ltd has plans to enter the affordable housing segment in the latter half of FY25, utilizing its strong distribution network. The company secures financing from diversified sources of capital, including term loans, proceeds from loans securitized, proceeds from the issuance of NCDs, issuance of principal protected market linked debentures, and proceeds from loans assigned from banks, financial institutions, mutual funds, and other domestic and international development financial institutions.
The company is registered with the RBI to carry on the business of non-banking financial institution without accepting public deposits. In the main management, Deenadayalan Lakshmipathy is chairman and continues to lead the company's strategic direction.
Five-Star Business Finance represents a well-established NBFC with a strong presence in South India, demonstrating consistent growth in a challenging lending environment while maintaining robust asset quality and expanding its geographical reach through strategic branch expansion.
