HDFC Mutual Fund has significantly increased its shareholding in Five-Star Business Finance Limited, raising its stake from 5.00% to 7.15% through strategic open market acquisitions. The disclosure, made under Regulation 29(2) of SEBI Takeover Regulations, represents a substantial vote of confidence in the non-banking financial company.

Shareholding Enhancement Details

The mutual fund acquired 63,26,176 additional shares on February 17, 2026, representing a 2.15% increase in its shareholding position. This acquisition brings HDFC Mutual Fund's total holding to 2,10,62,868 shares, equivalent to 7.15% of Five-Star Business Finance's paid-up equity share capital.

Company Capital Structure

Five-Star Business Finance maintains a paid-up equity share capital of ₹29,45,44,298, comprising 29,45,44,298 equity shares of ₹1 each. The company's shares are listed on both BSE Limited and National Stock Exchange of India Limited, providing liquidity for institutional investors like HDFC Mutual Fund.

HDFC Schemes Involved

The acquisition was executed across multiple HDFC Mutual Fund schemes managed by HDFC Trustee Company Limited, demonstrating diversified institutional interest. The participating schemes include:

• HDFC BSE 500 ETF
• HDFC BSE 500 Index Fund
• HDFC Banking & Financial Services Fund
• HDFC Value Fund
• HDFC Balanced Advantage Fund
• HDFC Large and Mid Cap Fund
• HDFC Multi Cap Fund
• HDFC NIFTY500 MULTICAP 50:25:25 INDEX FUND
• HDFC NIFTY SMALLCAP 250 ETF
• HDFC NIFTY SMALLCAP 250 INDEX FUND
• HDFC Mid Cap Fund

Regulatory Compliance

The disclosure was formally communicated to Five-Star Business Finance's Company Secretary & Compliance Officer, Mr. Vigneshkumar S M, on February 19, 2026. HDFC Asset Management Company Limited, acting as the investment manager for HDFC Mutual Fund schemes, ensured full compliance with SEBI regulations governing substantial acquisitions.

The increased shareholding reflects HDFC Mutual Fund's strategic positioning in the financial services sector, particularly in specialized lending businesses. The acquisition strengthens institutional participation in Five-Star Business Finance, which operates in the non-banking financial services space with a focus on business lending solutions.

Five star business finance Limited has announced the allotment of 21,870 equity shares on February 12, 2026, following the exercise of employee stock options under its established employee benefit scheme. The Business & Resource Committee of the Board approved this allotment under the Five-Star Associate Stock Option Scheme, 2018, in compliance with SEBI regulations.

Share Capital Enhancement

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

Exercise Price Structure

The employee stock options were exercised at differentiated pricing levels based on the scheme's framework:

Scheme Background and Compliance

The Five-Star Associate Stock Option Scheme 2018 was established prior to the company's initial public offering and has been subsequently aligned with SEBI Share Based Employee Benefit Regulations 2021. The scheme received shareholder approval at an extraordinary general meeting held on October 8, 2021, and obtained in-principle approval 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.

Exercise Terms and Conditions

Under the scheme's framework, the exercise period commences from the vesting date and expires within 60 calendar months from the relevant vesting date. The exercise price is determined by the Nomination & Remuneration Committee, ensuring compliance with applicable accounting standards and SEBI regulations, with the price not being less than the face value of the shares.

Financial Impact and Next Steps

The newly allotted shares will rank pari-passu with the existing equity shares of the company, providing equal rights and privileges to the holders. The company has confirmed it is in the process of completing the necessary formalities for listing these allotted shares on the stock exchanges. As per the unaudited financial results for the half year ended December 31, 2025, the company reported a basic earnings per share of INR 28.17 and diluted earnings per share of INR 28.09.