IndoStar Capital Finance Limited Incorporated in 2009, Mumbai based IndoStar Capital Finance Limited is a leading non-banking finance company (NBFC) registered with the Reserve Bank of India as a systemically important non-deposit taking company. The company operates four principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. It recently expanded its portfolio to offer vehicle finance and housing finance products.
IndoStar Capital Finance Limited conducts its retail operations through ten branches across Mumbai, Delhi, Chennai, Bengaluru, Hyderabad, Jaipur, Surat, Ahmedabad, Pune and Indore and central support office in Mumbai.
The lenders of the company include, among others, 14 public sector banks, 13 private sector banks, 21 mutual funds and four insurance companies and other financial institutions. The distribution network includes approximately 210 personnel in its in-house sales team, and approximately 648 third-party direct sales associates (DSAs) and other third-party intermediaries.
1. Strong SME lending businesses
2. A high-quality loan portfolio with low rates of Gross NPAs and Net NPAs.
3. Proven track record of delivering results. Between fiscal 2013 and 2017, the company’s Total Credit Exposure and total revenue grew at a CAGR of 30.0% and 31.4%, respectively.
4. Access to best industry practices and international corporate governance standards due to institutional Promoter.
On performance front :
As of 28th February 2018,IndoStar Capital Finance Limited conducted its operations through 71 branches across India with central office support at Mumbai. As on the said date its distribution network included 548 personnel and approx. 949 third party direct sales associates. Promoters are part of the Everstone Group. Company’s gross NPAs accounted for 0.6%, 0.2%, 1.4% and 1.7% of Gross Advances, while net NPAs accounted for 0.5%, 0.2%, 1.2% and 1.3% of Net Advances, respectively. Its average Cost of Borrowings in the fiscal 2015, 2016 and 2017 and the nine month period ended December 31, 2017 was 11.9%, 11.1%, 10.3% and 9.1%, respectively. Currently ICFL has around 100 branch network.
For last four fiscals (on a consolidated basis) ICFL has posted total revenue/net profits of Rs. 396.91 cr. / Rs. 112.13 cr. (FY14), Rs. 528.06 cr. / Rs. 149.04 cr. (FY15), Rs. 644.05 cr. / Rs. 191.64 cr. (FY16) and Rs. 719.92 cr. / Rs.210.80 cr. (FY17). For the first nine months ended on 31.12.17 of FY18 it has earned net profit of Rs. 164.08 cr. on revenue of Rs.585.95 cr. For last three fiscals it has posted an average EPS of Rs. 25.53 and an average RoNW of 11.62%. Issue is priced at a P/BV of 2.17 based on its NAV of Rs.263.96 as on 31.12.17. If we annualize latest earnings and attribute it on fully diluted equity post issue then asking price is at a P/E of around 24 against industry average of 28.66. As per offer documents it is showing its listed peers as L & T Finance, Piramal Enterprise, Aditya Birla Capital, Capital First, Shriram Transport Fin., Sundaram Fin., Cholamandalam Inv. , Repco Home that are trading at a P/E of around 25, 31,48, 21, 25, 36, 28 and 21 (as on 02.05.18).
Objects of the Issue:
The Selling Shareholders will be entitled to the proceeds of the Offer for Sale of their respective portions of the Offered Shares, respectively net of their share of the Offer related expenses. The Company will not receive any proceeds from the Offer for Sale
The Objects Of The Issue is to utilize the Net Proceeds from the Fresh Issue towards augmenting its capital base to meet future capital requirements.
»» Issue Open: May 9, 2018 – May 11, 2018
»» Issue Type: Book Built Issue IPO
»» Issue Size:
› Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to Rs 700.00 Cr
› Offer for Sale of 20,000,000 Equity Shares of Rs 10 aggregating up to Rs [.] Cr
»» Face Value: Rs 10 Per Equity Share
»» Issue Price: Rs 570 – Rs 572 Per Equity Share
»» Market Lot: 26 Shares
»» Minimum Order Quantity: 26 Shares
»» Listing At: BSE, NSE
Conclusion : Long Term Perspective one can subscribe this IndoStar Capital Finance Limited IPO.