Five-Star Business Finance: Business Overview & Financial Analysis
Five-Star Business Finance is a non-banking finance company (NBFC) registered with the Reserve Bank of India, headquartered in Chennai, Tamil Nadu. The enterprise provides secured business loans to micro-entrepreneurs, self-employed individuals, and unbanked commercial entities across semi-urban and rural markets in India. Operating through a localized branch network, Five-Star Business delivers small-ticket mortgage loans backed by self-occupied residential property collateral to power small business operations.
Key Financial Ratios & Performance Metrics of Five-Star Business Finance (Q4 FY26 / FY26)
Five-Star Business tracks net interest margins, capital adequacy ratios, asset quality indicators, and return ratios across its operational lending cycles.
- Capital Adequacy Ratio (CRAR) – 48.50% (Tier-I CRAR: 47.80%)
- Net Interest Margin (NIM) – 16.85%
- Gross Stage 3 Assets (GNPA) Ratio – 1.32%
- Net Stage 3 Assets (NNPA) Ratio – 0.68%
- Provision Coverage Ratio (PCR) – 48.80%
- Cost to Income Ratio – 34.20%
- Return on Assets (ROA) – 8.20%
- Return on Equity (ROE) – 18.50%
The enterprise maintains a capital adequacy ratio of 48.50% as of March 31, 2026, well above statutory regulatory mandates. Net interest margins reached 16.85%, while Gross Stage 3 assets held low at 1.32%, reflecting underwriting discipline across mortgage-backed loan books.
Assets Under Management (AUM) & Loan Book Growth of Five-Star Business Finance (FY26)
Five-Star Business structures its credit portfolio around secured small business loans, housing finance extensions, and property-backed credit lines.
- Total Assets Under Management (AUM) – Rs 11,850.40 crore (+28.5% YoY)
- Small Business Loans Share – 85.0% of Total AUM
- Property Mortgage & Housing Loans Share – 12.5% of Total AUM
- Personal & Consumer Loans Share – 2.5% of Total AUM
- Total Active Borrowers Base – 420,000+ active loan accounts
- Average Ticket Size per Sanction – Rs 3.85 lakh
Assets Under Management expanded 28.5% year-on-year to cross Rs 11,850 crore in FY26. Secured small business loans form 85% of total credit dispatches, maintaining an average ticket size of Rs 3.85 lakh per customer account.
Geographic Presence & Branch Network Scale of Five-Star Business Finance (Q4 FY26)
Five-Star Business operates a physical branch network across Southern, Central, and Western Indian states, penetrating deep into Tier-3 to Tier-6 towns.
- Total Operational Branch Network – 620 operational branches across India
- Southern Region Branch Share (Tamil Nadu, Andhra Pradesh, Telangana, Karnataka) – 78.0% of Total Network
- Central & Western Region Share (Madhya Pradesh, Maharashtra, Gujarat, Chhattisgarh) – 22.0% of Total Network
- Tamil Nadu Home State AUM Contribution – 38.2% of Total AUM
- Andhra Pradesh & Telangana AUM Contribution – 32.5% of Total AUM
Branch operations remain concentrated in South India, with Tamil Nadu, Andhra Pradesh, and Telangana generating seven-tenths of total AUM. Regional expansion into Madhya Pradesh, Maharashtra, and Gujarat expands the company's addressable footprint in Central India.
Borrowing Profile & Sourcing Mix of Five-Star Business Finance (FY26)
Five-Star Business diversifies its liability borrowing profile across term loans, debt capital market issuances, and securitization lines.
- Term Loans from Commercial Banks Share – 58.2% of Total Borrowings
- Non-Convertible Debentures (NCDs) & Bonds Share – 22.5% of Total Borrowings
- Development Finance Institutions (DFIs) & Subordinated Debt – 12.3% of Total Borrowings
- Direct Assignment & Securitization Proceeds – 7.0% of Total Borrowings
- Total Outstanding Debt Facilities – Rs 6,820.50 crore
- Weighted Average Cost of Funds – 9.45% (compressed by 35 bps YoY)
Commercial bank term loans fund nearly six-tenths of outstanding debt liabilities, lowering overall capital costs. Weighted average cost of funds compressed to 9.45% in FY26 due to rating upgrades across national credit rating agencies.
Credit Underwriting & Collateral Coverage Profile of Five-Star Business Finance (FY26)
Five-Star Business applies a cash-flow-based assessment model backed by physical self-occupied residential property collateral.
- Collateral Security Ratio – 100% of loans secured by self-occupied residential property
- Average Loan-to-Value (LTV) Ratio – 38.5% at sanction
- In-House Credit Assessment & Legal Vetting – 100% executed in-house by internal field teams
- In-House Field Collection Operations Share – >98% of monthly collections handled directly
Underwriting guidelines enforce a conservative average Loan-to-Value ratio of 38.5% at the time of sanction. Internal credit and legal field teams conduct direct cash-flow audits and property verification without third-party agent reliance.
Collection Efficiency & Asset Quality Metrics of Five-Star Business Finance (Q4 FY26)
Five-Star Business monitors monthly collection efficiencies, 30+ DPO overdues, and Stage 3 asset recoveries across regional branch units.
- Monthly Collection Efficiency Rate – 98.2% across active loan accounts
- 30+ Days Past Due (30+ DPD) Portfolio Share – 8.20% (vs 9.40% in FY25)
- 90+ Days Past Due (90+ DPD / Gross Stage 3) Share – 1.32%
- Annualized Credit Cost Ratio – 0.85%
- Total Credit Impairment Provisions Reserve – Rs 165.40 crore
Collection efficiency held strong at 98.2% during Q4 FY26, bringing the 30+ DPD portfolio down to 8.20%. Credit costs held at 0.85% of average assets, reflecting recovery execution through SARFAESI enforcement actions.
Latest Quarterly Financial Performance of Five-Star Business Finance (Q4 FY26)
Five-Star Business recorded strong top-line interest income expansion and net profit growth during the fourth quarter of FY26.
- Total Revenue from Operations (Interest Income) – Rs 685.40 crore (+26.2% YoY)
- Net Interest Income (NII) – Rs 485.20 crore (+28.4% YoY)
- Pre-Provisioning Operating Profit (PPOP) – Rs 362.50 crore (+30.2% YoY)
- Consolidated Net Profit After Tax (PAT) – Rs 268.40 crore (+32.5% YoY)
- Quarterly Annualized Return on Assets (ROA) – 8.35%
Fourth-quarter interest income expanded 26.2% year-on-year to Rs 685.40 crore, supported by 28.5% growth in underlying AUM. Consolidated Net Profit After Tax reached Rs 268.40 crore, producing an annualized Return on Assets of 8.35%.
Consolidated Annual Financial Performance of Five-Star Business Finance (FY26)
Five-Star Business delivered record operational turnover and net profitability for full financial year FY26.
- Full Year Total Revenue from Operations – Rs 2,480.50 crore (+25.8% YoY)
- Full Year Net Interest Income (NII) – Rs 1,780.20 crore (+27.2% YoY)
- Full Year Pre-Provisioning Operating Profit (PPOP) – Rs 1,320.80 crore (+29.5% YoY)
- Consolidated Net Profit After Tax (PAT) – Rs 985.40 crore (+31.2% YoY)
- Return on Equity (ROE) – 18.50%
Full-year operating revenues crossed Rs 2,480 crore in FY26, as consolidated Net Profit After Tax expanded 31.2% to Rs 985.40 crore. Financial performance produced a Return on Assets of 8.20% and a Return on Equity of 18.50%.
Capital Structure & Liquidity Position of Five-Star Business Finance (Q4 FY26)
Five-Star Business operates a low-leverage capital structure backed by strong equity capital and liquid cash reserves.
- Total Net Worth Base – Rs 5,850.00 crore
- Debt to Equity Ratio – 1.17x
- Cash, Bank Balances & Liquid Investments – Rs 1,450.00 crore
- Undrawn Sanctioned Bank Credit Lines – Rs 820.00 crore
- Capital Conservation Buffer – 33.50% Tier-I surplus above 15% statutory minimum
Total equity net worth expanded to Rs 5,850.00 crore, maintaining a conservative leverage ratio of 1.17x debt to equity. Cash reserves and undrawn bank lines total Rs 2,270 crore, providing liquidity buffers for upcoming lending cycles.
Management Commentary & Strategic Outlook of Five-Star Business Finance (Q4 FY26 / FY27)
Management guidance outlines strategic priorities centered on AUM volume growth, branch expansion in Central India, and credit quality protection.
- Management targets achieving a 25%–28% AUM CAGR over the FY27–FY29 period.
- Net Interest Margins (NIM) are guided to sustain within the 16.0%–17.0% corridor through yield protection.
- Branch network expansion will add 60–80 new branches annually in Madhya Pradesh, Maharashtra, and Gujarat.
- Gross Stage 3 assets ratio is targeted to be maintained below 1.50% through direct field collections.
- Credit costs will be guided below 1.00% of average AUM via collateralized underwriting frameworks.
Management anticipates rising credit demand among micro-entrepreneurs and self-employed borrowers to drive loan dispatches. Operational focus centers on scaling branch coverage across Central India, maintaining high collection efficiencies, and protecting net interest margins.
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Sources & References
- Five-Star Business Finance Q4 & Full Year FY26 Consolidated Financial Results Disclosures (May 2026)
- Five-Star Business Finance Q4 FY26 Investor Presentation & Fact Sheet (May 2026)
- BSE India & National Stock Exchange of India (NSE) Corporate Filings for Five-Star Business Finance
- Ticker Finology Five-Star Business Finance Page
Disclaimer
The information presented above on Five-Star Business Finance has been compiled from the company's Annual Reports, Investor Presentations, Earnings Call (Concall) Transcripts, official regulatory filings and the financial data available on Finology Ticker. Certain figures, classifications or comparisons may vary due to differences in accounting policies, reporting methodologies or subsequent restatements by the company. This content is intended solely for informational purposes and should not be considered as investment advice. Investors are advised to refer to the latest company filings and the updated financial data, ratios and disclosures available on this Finology Ticker Five-Star Business Finance page before making any investment decision. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.