Five Star Business Finance will stick to building a product line in the secured lending segment, chairman and managing director Lakshmipathy Deenadayalan said.
“From an asset perspective, we will be lending to the underserved market for the need of business, for the need of asset creation like housing, renovation and upgrades of the house,” Deenadayalan said. “We do not envisage any product change or product diversification as of now. I am a strong believer that as long as you are a single-product company, you go deeper, you understand.”
The initial public offering of the Chennai-based non-deposit taking non-bank lender was subscribed 70% on the final day. The offer opened for subscription on Wednesday and closed on Friday. The portion set aside for institutional investors was subscribed the highest at 1.77 times while the portion set aside for retail investors was subscribed a mere 11%. The company’s stock will be listed on the exchanges on Monday.
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Currently, the lender offers secured business loans to micro entrepreneurs and self-employed individuals. It has strong presence in Tamil Nadu, Andhra Pradesh, Telangana and Karnataka. The average ticket size is currently at Rs 3 lakh, which the company sees touching the Rs 4.5 lakh-mark going ahead.
“If you look at the data, our AUM growth and the number of customer growth is the same. It clearly indicates that we do not lend to the same customers and burden the family with loans just for growth purposes,” Deenadayalan said. “We want to acquire new customers in new geographies or in existing geographies so that your risk is mitigated well.”
The company’s total assets stood at Rs 6,343 crore as on March 31.