Peak XV, TPG Asia and Matrix Partners sell partial stake in Five Star Business Finance worth ₹1,656 crore

Three prominent global funds, namely Peak XV Partners (formerly known as Sequoia Capital), TPG Asia, and Matrix Partners, divested partial stakes in Five-Star Business Finance on Friday. The cumulative value of these transactions through bulk deals amounted to ₹1,656 crore.

TPG Capital, via its affiliate TPG Asia VII SF Pte, divested 89,07,493 shares of Five-Star Business, representing a 3.05% stake, at a rate of ₹730 per share. This transaction amounted to approximately ₹650 crore, as per bulk deals data on the National Stock Exchange. 

As of the end of September, the international private equity fund maintained a 14.29% stake in the non-banking financial company (NBFC).

Peak XV Partners Investments divested 45,67,945 shares, equivalent to a 1.6% stake, amounting to approximately ₹333 crore. As of the end of September, Sequoia retained a 7.26% stake in the company.

Matrix Partners, a constituent of the promoter group, divested 92,13,440 shares, equivalent to a 3.2% stake, for approximately ₹673 crore. As of the end of September, Matrix Partners retained a 4.75% ownership stake in Five-Star Business Finance.

In September, Matrix Partners had divested a 3% stake in the company for approximately ₹650 crore. Recent reports on Thursday indicated that these global firms are contemplating the sale of a partial stake in the non-bank lender through the open market on Friday.

The open market sale instigated a selling spree in the stock, resulting in a nearly 3% decline on the National Stock Exchange, closing at ₹735.15. Over the past six months, the stock has registered an impressive growth of more than 26%.

In the quarter concluding in September, the company disclosed a remarkable year-on-year (YoY) surge, with net profit soaring over 38% to reach ₹199 crore. Simultaneously, interest income exhibited robust growth, escalating by 41% to ₹504 crore.

During the quarter ending in September, both mutual funds and Foreign Portfolio Investors (FPIs) substantially increased their ownership in the company in a sequential manner.