Five Star Business Finance Expects 30% Growth In AUM In FY24

Chennai-based non-banking financial company (NBFC) Five Star Business Finance Ltd has said it expects 30 per cent growth in its assets under management (AUM) this financial year, from Rs 6,915 crore in FY23 to about Rs 9,000 crore.  

“For the current year, we are guiding for 30 per cent growth. We are confident of crossing Rs 9,000 crore. We may see a slight increase in ticket size this year,” said Rangarajan Krishnan, CEO, Five Star Business Finance. In FY23, the company's AUM rose by 37 per cent to Rs 6,915 crore, from Rs 5,067 crore in 2021-22.

“In FY24, the ground realities are far better. Greenshoots are clearly there. We will have three growth reasons. We will put up at least 60 new branches during the year and will add more staff to existing branches. Third is we will also see some increase in the ticket size,” Krishnan said, adding that prior to Covid, the firm's average ticket size was Rs 3.5 lakh, and dipped to Rs about Rs 2.5 lakh during the pandemic. Now, it expects the ticket size to move back to the pre-Covid levels.  

During the previous financial year, the company added 73 branches, taking the total number to 373. In FY23, the NBFC had a net profit of Rs 604 crore, up 33 per cent from Rs 454 crore the previous year. Its disbursement during the year rose by 93 per cent to Rs 3,391 crore.

During the fourth quarter, the company had a collection efficiency of 100.5 per cent  and the strong growth in disbursements and collection efficiencies pave the way for a strong trajectory across growth, quality and profitability, it said.

“Collections are coming back on track. We were averaging little over 100 per cent. Advantages that we enjoy are that our average EMIs for loan is Rs 7,500-8,000. EMIs are very small,” Krishnan added.