Small business lender Five Star gets $234 mn in new investment round

Chennai-based registered non-banking finance company will use the capital to expand its business.

A consortium will invest $234 million in Chennai-based Five-Star Business Finance Limited (Five Star) in a deal that values the small-businesses lender at $1.4 billion, the parties announced on Friday.

Five Star’s traditional investors, led by Sequoia Capital India with participation from Norwest Venture Partners, and new ones, led by KKR with participation from TVS Capital, attended the funding round. The investment will be a combination of primary infusion and secondary shares sold by Morgan Stanley Private Equity. 

Martix Partners and TPG Capital will continue with their investment in the company.

Five Star, a registered non-banking finance company with 262 branches in eight