About the Company:
IndoStar Capital Finance is a leading Non-Banking Finance company (NBFC) registered with the Reserve Bank of India as a systemically important non-deposit taking company.
They are a professionally managed and institutionally owned organization which is primarily engaged in providing financing solutions to corporates and loans to Small and Medium Enterprise (SME) borrowers in India.
Company’s main business is Corporate & SME Lending, However they recently expanded their portfolio to offer vehicle finance and housing finance products.
Company expects to benefit from strong capital sponsorship and professional expertise of their Promoter (INDOSTAR CAPITAL), which is part of the Everstone Group, an India and Southeast Asia focused investor which has approximately US$4.0 billion of Assets Under Management.
Company conducts the retail operations through ten branches across Mumbai, Delhi, Chennai, Bengaluru, Hyderabad, Jaipur, Surat, Ahmedabad, Pune and Indore and their central support office in Mumbai.
Their distribution network included approximately 210 personnel in their inhouse sales team, and approximately 648 third-party direct sales associates (the DSAs) and other third-party intermediaries who are empaneled with the company.
Company’s Business. (Corporate Lending, SME lending, Vehicle Financing and Housing Financing).
Corporate Lending.
- The corporate lending business primarily consists of (i) Lending to mid-to-large sized corporates in manufacturing, services and infrastructure industries.
- (ii) Lending to real estate developers, mainly for financing project level construction of residential and commercial building projects and take-out of early-stage equity investors.
- Corporate lending business accounted for 78.6% of Company’s Total Credit Exposure for the fiscal 2017. As of September 30, 2017, The Corporate Lending Credit Exposure amounted to Rs.3554.7 crores.
SME Lending.
- SME lending business was commenced in 2015, Company gives secured loans for business purposes to small and medium size enterprises, including businessmen, traders, manufacturers and self-employed professionals.
- They currently provide SME lending loans from their branches located in ten key locations across India, namely Mumbai, Delhi, Chennai, Bengaluru, Hyderabad, Jaipur, Surat, Ahmedabad, Pune and Indore.
- Company’s SME lending business accounted for 21.4% of their Total Credit Exposure for the fiscal 2017. As of September 30, 2017, The SME Lending Credit Exposure amounted to Rs.967 crores
Vehicle Finance.
- Company’s vehicle finance business primarily involves providing financing for purchases of used or new commercial vehicles, passenger vehicles and two-wheelers. Company had commenced vehicle finance business in Nov 2017.
Housing Finance.
- Company’s housing finance business comprises two business lines, namely (i) affordable housing finance and (ii) retail housing finance
- Affordable housing finance which commenced operations in September 2017, and (ii) retail housing finance in March 2018.
- Company operates the housing finance business through their wholly-owned subsidiary IndoStar Home Finance Private Limited.
- The affordable housing finance business line primarily involves loans to the salaried and self-employed customers for housing purposes where the property cost is typically up to Rs.50 Lakhs, and the loan amount is capped at Rs.30 Lakhs.
- Company’s retail housing business line will primarily extend loans to salaried and self-employed customers for the purchase of residential properties. As of September 30, 2017, the Housing Finance Credit Exposure amounted to Rs.43 lakhs.
Company’s Key Clients:
Management Team:
- Mr. Dhanpal Jhaveri (Designation: Chairman and Non-executive Director)
- Mr. Sameer Sain (Designation: Non-executive Director)
- Mr. Alok Oberoi (Designation: Non-executive Director)
Positives for the Company:
Steadily Expanding the Business:
Initially Company had started with corporate lending business and after that they forayed into SME lending in 2015. Since then Company’s SME lending business has grown
rapidly.
And as of September 30, 2017, they operated 10 branches across eight states which are engaged in SME lending and had cumulatively disbursed Rs.1355.6 crores since commencement of the SME lending business.
In August 2016, Company had received the NHB license for commencing operations of their housing finance subsidiary and commenced affordable housing business in September 2017.
They have also launched their vehicle financing business in November 2017. And currently Company is in the process to provide retail housing finance solutions.
Well-established Corporate and Strong SME Lending Businesses.
Company has established a strong corporate lending business, primarily providing secured loans to manufacturing and service companies by way of structured financing, promoter financing and special situation funding and to leading real estate developers.
Company has also built a strong SME lending business focused on extending secured loans to small and medium size enterprises, including businessmen, traders, manufacturers and self-employed professionals.
Plans to Expand the Geographical Footprint.
Company plans to expand the business operations, including sourcing and sale of their products, into regions where urbanization, commercial activity and household incomes are expected increase, which will result in demand for their various loan products.
Company expects that a significant portion of their geographic expansion will include tier I, tier II and tier III cities in the northern, southern and western regions of India.
They intend to grow their branches in fifteen key states across India and expects to have approximately 130 branches by June 2018.
Financials of the Company: (Consolidated)
| (in Crores) | FY 14 | FY 15 | FY 16 | FY 17 | 31st Dec17 |
|---|---|---|---|---|---|
| Revenue | 396.9 | 528.05 | 644.05 | 719.9 | 585.94 |
| Net Profit | 112.13 | 149.03 | 191.64 | 210.8 | 164.08 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Indostar Capital Finance Ltd | 10 | 26.31 | 21.74 | 11.08% | 242.82 |
| L&T Finance Holdings Ltd. | 10 | 5.14 | 33.11 | 11.44% | 51.87 |
| Piramal Enterprises Ltd | 2 | 72.57 | 37.70 | 8.41% | 862.44 |
| Aditya Birla Capital Ltd | 10 | 6.35 | 26.94 | 8.04% | 53.52 |
| Capital First Ltd | 10 | 23.97 | 28.88 | 10.37% | 236.48 |
| Shriram Transport Finance | 10 | 55.78 | 24.70 | 11.17% | 499.46 |
| Sundaram Finance Ltd | 10 | 61.52 | 30.47 | 14.19% | 433.47 |
| Cholamandalam Investment and Finance Company Ltd. |
10 | 46.03 | 27.92 | 16.63% | 276.79 |
| Repco Home Finance Ltd | 10 | 30.00 | 20.83 | 16.32% | 183.75 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 9th May 2018 |
| Issue Closes on:. | 11th May 2018 |
| Issue Price | Rs.570 – 572 |
| Face Value | Rs.10 |
| Minimum Lot | 26 shares |
| Minimum Investment | Rs.14,872 |
| Issue Constitutes | 35.45% |
| Issue Size | Rs.1844 cr |
| Market Cap | Rs.5200 cr |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 1,22,37,762 |
| Equity Shares Offered (OFS) | 2,00,00,000 |
| Total Equity Shares Offered (Fresh + OFS) | 3,22,37,762 |
| Equity Shares Prior to the Issue | 7,86,79,259 |
| Equity Shares after the Issue | 9,09,17,021 |
Important Dates:
| Finalization of Basis of Allotment | on or before 16th May 2018 |
| Initiation of Refunds | on or before 17th May 2018 |
| Credit of Equity Shares: | on or before 18th May 2018 |
| Listing Date: | on or before 21st May 2018 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | 9/5 | 10/5 | 11/5 |
|---|---|---|---|---|
| QIB | 64,35,086 | 1.99 | 1.95 | 16.08 |
| NII | 48,42,106 | 0.01 | 0.03 | 6.9 |
| Retail | 1,12,98,246 | 0.13 | 0.35 | 1.45 |
| Employee | ———– | —— | —- | —- |
| TOTAL | 2,25,75,438 | 0.63 | 0.68 | 6.79 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) | Debt Equity Ratio |
|---|---|---|---|---|
| 26.31 | 21.74 | 11.08% | 242.82 | 1.58 |
Markets Guruji Opinion:
| IPO View | Apply For: | Expected listing Gain: |
|---|---|---|
| Subscribe | Long Term | 10% |
Grey Market Premium :
| Date | IPO | Price Band | Grey Market premium | Kostak Rates |
|---|---|---|---|---|
| 01/05/18 | IndoStar Capital Finance Ltd | Rs.570 – 572 | 42- 45 | 700 – 750 |
| Check IPO Allotment Status: |
|---|
Link InTime Website (Click on the below Link)https://linkintime.co.in/PublicIssue/ |
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| Company Contact Info: |
|---|
| Indostar Capital Finance Ltd One Indiabulls Center, 20th Floor Tower 2A, Jupiter Mills Compound Senapati Bapat Marg, Mumbai 400 013 Maharashtra, India Telephone: +91 22 4315 7000 Facsimile: +91 22 4315 7010 Website: www.indostarcapital.com |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C-101, 1st Floor, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai 400 083, Maharashtra, India Telephone: +91 22 4918 6200 E-mail: indostar.ipo@linkintime.co.in Website: www.linkintime.co.in |
