Five star business finance Limited has announced the allotment of 2,99,110 equity shares on March 25, 2026, following the exercise of employee stock options under its Five-Star Associate Stock Option Scheme, 2018. The Business & Resource Committee of the Board approved this allotment in compliance with SEBI regulations.

Share Capital Enhancement

The allotment has resulted in a significant increase in the company's paid-up share capital structure:

The newly allotted shares will rank pari-passu with the existing equity shares of the company, ensuring equal rights and privileges for all shareholders.

Exercise Price Structure

The employee stock options were exercised at varying price points, generating substantial proceeds for the company:

The total money realized from the exercise of these options amounted to INR 1,90,68,410, reflecting the significant value creation under the employee stock option scheme.

Scheme Background and Compliance

The Five-Star Associate Stock Option Scheme 2018 was originally instituted prior to the company's IPO and has been subsequently amended to align with SEBI (Share Based Employee Benefits) Regulations, 2021. The scheme received shareholder approval at an extraordinary general meeting held on October 8, 2021, with in-principle approval obtained from both the National Stock Exchange and Bombay Stock Exchange. The scheme was further ratified by shareholders at the Annual General Meeting held on September 16, 2023.

Under the scheme terms, options can be exercised within 60 calendar months from the relevant vesting date, providing employees with flexibility in timing their exercise decisions.

Financial Impact and Earnings

The company reported its earnings per share based on unaudited financial results for the half year ended December 31, 2025. The basic earnings per share stood at INR 28.17, while the diluted earnings per share was INR 28.09, reflecting the impact of potential dilution from outstanding employee stock options.

Five Star Business Finance is currently completing the necessary formalities with stock exchanges for the listing of the newly allotted shares, ensuring full compliance with regulatory requirements.

Five Star Business Finance Limited has successfully completed the conversion of 3,10,000 share warrants into equity shares, marking a significant capital structure enhancement for the Chennai-based financial services company. The conversion was executed at INR 770.00 per share, comprising a face value of INR 1.00 and a premium of INR 769.00.

Warrant Conversion Details

The Board of Directors approved the conversion through a circular resolution passed on March 23, 2026, with the final approval received at 23:57 hours. The conversion involved two key executives of the company who exercised their warrants in full.

Payment Structure and Consideration

The warrant conversion followed a structured payment mechanism established during the original allotment. The allottees had previously paid 25% of the total issue price as upfront consideration during warrant allotment, with the remaining 75% paid at the time of conversion.

Impact on Share Capital

The warrant conversion has resulted in an increase in the company's paid-up share capital. Following the allotment of new equity shares, the capital structure has been enhanced as follows:

Shareholding Pattern Changes

The conversion has resulted in changes to the shareholding pattern, particularly affecting the promoter group's stake. Based on fully diluted capital calculations:

• Lakshmipathy Deenadayalan's holding increased from 10.36% to 10.44%
• Srikanth Gopalakrishnan's holding increased from 0.41% to 0.43%
• Overall promoter group holding increased from 18.41% to 18.48%

Regulatory Framework and Timeline

The warrant conversion was executed under the regulatory framework established by SEBI LODR Regulations and SEBI ICDR Regulations. The original warrant allotment received necessary approvals including shareholder approval at the Annual General Meeting held on September 13, 2024, and in-principle approval from BSE Limited and National Stock Exchange Limited dated October 18, 2024.

The share warrants were valid for conversion within 18 months from the allotment date, with the deadline set for April 24, 2026. The newly allotted equity shares are subject to lock-in provisions as per applicable SEBI ICDR Regulations and will be credited to the allottees' demat accounts upon receipt of requisite listing approvals from NSE and BSE.