NBFC is backed by PE player Evertone and the business is completely different from microfinance companys who have become small finance Banks. The IPO valuation is reasonable compared to peers. The business is run on sound footing with good risk management practices and company has consistently increased its top and bottom line Y on Y. It has low NPA and diversification to vehicle finance and housing finance should support future growth. The kind of business company is engaged in does not require huge branch network and helps to contain costs. One concern I have is that company does not have a dividend policy currently and may continue in similar fashion post IPO. Upside is limited and it is a long time hold for meaningful gains. However, I sense a listing gain at IPO price. It will not be spectacular, but OK.
@chitra Kamat, are you somehow related to Mr Nithin Kamath?
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May 6, 2018 9:09:02 AM
IPO Mentor (900+ Posts, 700+ Likes)
@chitra kamat
If a company engaged in finance business dont have sufficient branches (atleast one per state capital) how they will grow their top line. Person of uttarpradesh will not come to rajasthan or dehli for their finance needs. At least it have good no of branches in one or two states like AU and BANDHAN. It may be reasonable in compare to earning of peer but "in compare to branches its not".
This company is engaged in wholesale banking and not retail banking. Large branch network is a feature of retail banking. Vehicle finance and housing loan finance can also be conducted through DSA and dealer network like foreign banks do with limited branch network. Lending to vehicle finance and real estate finance can be through wholesale network only like lending to real estate developers, housing societies, transport companies, professionals etc. You may be aware that Citi bank under Mr. Jerry Rao pioneered vehicle finance in India and built a huge retail asset base before divesting the portfolio. We are in the digital age when we do not need to visit a brick and mortar banking outlet to do our banking business. Companies like Bandhan Bank, Ujjivan, Equitas, AU etc. cater to micro finance segment mainly where client base is dependent on brick and mortar banking and not exposed to digital banking. This information may be useful to clear the confusion and old hat thinking.
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May 7, 2018 11:25:32 AM
IPO Mentor (900+ Posts, 700+ Likes)
LOL for the first time I heard 'wholesale' for banking
Lo! And behold... Jhunjhunwala backed John energy is coming with ~350cr ipo... Hahaha. Not convinced! Oil and gas? In 2018? No... But maybe a black swan, on the name of Jhunjhunu...
Though this issue is flawed, expect atleast 12% gain on the high on listing day, mark my words!
Whether I will apply or not depends on lots of factors, will update later. But till now, not convinced. See my post on losing percentages, that's why everstone wanna exit, maybe?
SEBI allows equity bourses to extend derivative trade till 11.55 pm !!
Markets regulator Securities and Exchange Board of India (Sebi) on Friday allowed domestic stock exchanges to extend timing for equity derivatives trading till 11.55 pm with effect from October 1, 2018.
The move is seen as a bid to integrate various segments of securities markets at the exchanges level, the markets watchdog said.
In case stock exchanges are desirous of extending trade timings beyond the extant trading hours, prior approval from Sebi shall be sought along with a detailed proposal, including the framework for risk management, settlement process, monitoring of positions, availability of manpower, system capability and surveillance systems, Sebi said.
Earlier in December, the regulator had announced integration of stocks and commodities trading on a single exchange from October, a move that paved the way for stock exchanges such as BSE and NSE, to launch their own commodity trading platforms.
With Friday's move, Sebi opened up the doors for equity derivatives segment to operate from 9:00 am to 11:55 pm on the lines commodity derivatives trading, which happens between 10 am and 11:55 pm.