Issue Date:?08th Aug ? 10th Aug 2018
Price Band(Rs):?418-422 |??Lot Size (No. of Share):?35
Company Background
Incorporated in 1991, Bengaluru based CreditAccess Grameen Limited is a company engaged in providing micro-loans to women in Rural Areas in India. According to CRISIL Research, the company is third largest NBFC-MFI in gross loan portfolio in the country. The company primarily focuses on providing income generating loans to women with low annual household income in Rural Areas. It also provides other types of loans for family welfare, home improvement and emergency funds.
Issue Details
| Issue Opens | 08-Aug-18 |
| Issue Closes | 10-Aug-18 |
| Issue Size(Rs in Crore) | 1131.19 |
| Face value(per equity share) | 10 |
| Price Band(Rs.) | 418-422 |
| Lot Size(No of Share) | 35 |
| No of Shares on Offer(Crore) | 2.68 |
| QIB(%) | 50% |
| Non-Institutional(%) | 15% |
| Retail(%) | 35% |
| Commencement of Trading | 23-Aug-18 |
Strengths
- Microfinance loans unsecured; susceptible to credit risks
- Lending operations involve significant amounts of cash collection.
- Competition from banks & financial institutions.
Concerns
- Deep penetration in Rural Areas characterized by low competition and built through contiguous district based expansion.
- Robust customer selection and risk management policies resulting in healthy asset quality.
- Strong track record of financial performance and operating efficiency.
Our View
On upper price band of Rs 442 and EPS o1f Rs12.6, P/E works out to be 34.4x. On last 3 years average EPS of Rs 11.37, P/E works out to be 37x. Therefore for price band of 418-422, P/E works out to be 34x to 37x. Its listed peers like Ujjivan Financial services is trading at P/E of 627x (Highest) and Shriram Transport Finance trading at P/E of 17x (Lowest) and industry average P/E is 101x. Hence, this IPO Issue is fully prices at Rs 422.
The company has relatively lower valuation, higher quality of the loan assets, and good return ratios. According to management, they will continue their core business and are not having banking and other activities forey plans. With the current portfolio it will expand its horizon and performance going forward. Considering all these positive factors, investors can invest in this IPO for long term.
CreditAccess Grameen Ltd Allotment Status Online
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