Five Star Business Finance Ltd IPO

Incorporated in 1983, Kolkata-based Tarsons Products manufactures laboratory products that are used in various research organisations, pharmaceutical companies, academia institutes, hospitals and diagnostic centres.

The company plans to go public and here’s all you need to know about this IPO.

Here’s the consolidated financial information for the last three years:

• Fastest AUM growth among its compared peers with more than Rs. 30,000 million in AUM, with strong return and growth metrics and a significant potential addressable market;
• Among the select institutions to develop an underwriting model that evaluates the cash-flows of small business owners and self-employed individuals in the absence of traditional documentary proofs of income;
• Strong on-ground collections infrastructure leading to its ability to maintain a robust asset quality;
• Ability to successfully expand to new underpenetrated geographies through a calibrated expansion strategy;
• 100% in-house sourcing, comprehensive credit assessment and robust risk management and collections framework, leading to good asset quality;

• The Coronavirus pandemic (COVID-19) has had certain adverse effects on its business, operations, cash flows and financial condition and the extent to which it or the effect of outbreaks of any other severe communicable disease may continue to do so in the future, is uncertain and cannot be predicted.
• The company is require substantial capital for its business and any disruption in its sources of capital could have an adverse effect on its business, results of operations and financial condition.
• The risk of non-payment or default by its borrowers may adversely affect its business, results of operations and financial condition.
• A substantial portion of its customers are first time borrowers which increases risks of non-payment or default for it.
• Its inability to meet its obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business, results of operations and financial condition.

• Increase penetration in existing markets through increasing branch staff numbers, increasing its branch network in the existing geographies and diversifying to contiguous markets;
• Continue to focus on small business owners and self-employed individuals primarily in the semi-urban and urban markets of India, as well as in rural markets where CRISIL expects faster growth in bank credit activity as financial awareness increases;
• Optimize its borrowing costs, reduce operating expenses further and continue to expand and diversify its lender base;
• Continue to invest in technology and data analytics to build a scalable and efficient operating model / to improve customer experience, increase productivity and decrease costs;
• Focus on enhancing its risk management framework;