MAS FINANCIAL SERVICES LIMITED is a Gujarat-headquartered NBFC with more than two decades of business operations and as of September 30, 2016, they operated across six States and the NCT of Delhi. Their business and financing products are primarily focused on middle and low income customer segments, and include five principal categories: (i) micro-enterprise loans; (ii) SME loans; (iii) two-wheeler loans; (iv) Commercial Vehicle loans (which include new and used commercial vehicle loans, used car loans and tractor loans); and (v) housing loans. As of March 31, 2016 and September 30, 2016, their AUM was 26,998.50 million and 29,278.15 million, respectively. Their AUM increased at a CAGR of 39.46% from 7,136.64 million as of March 31, 2012 to 26,998.50 million as of March 31, 2016. As of September 30, 2016 we had more than 530,000 active loan accounts, across more than 3,200 Customer Locations in six States and the NCT of Delhi, served through their 119 branches. In addition to their sales team, they have entered into commercial arrangements with a large number of sourcing intermediaries, including commission based DSAs and revenue sharing arrangements with various dealers and distributors where part of loan default is guaranteed by such sourcing partners. As of September 30, 2016, they had 344 such sourcing intermediaries for their two-wheeler loan segment and 350 such sourcing intermediaries for their Commercial Vehicle loan segment. As of September 30, 2016, they had entered into arrangements with 32 sourcing intermediaries for their housing loan segment, who typically are affordable housing project developers and property agents. On performance front, MFSL has (on a consolidated basis) posted revenue/net profits of Rs. 184.92 cr. / Rs. 33.09 cr. (FY14), Rs. 238.20 cr. / Rs. 40.80 cr. (FY15), Rs. 304.20 cr. / Rs. 51.45 cr. (FY16) and Rs. 364.70 cr. / Rs. 69.33 cr. (FY17). For Q1 of current fiscal it has reported net profit of Rs. 23.70 cr. on revenue of Rs.104.33 cr. For last five years it has posted CAGR of 26.3% and 25.9% in revenues and net profits respectively. For last three fiscals, it has posted an average EPS of Rs. 13.13 and average RoNW of 23.75% on paid up equity capital of Rs. 42.96 cr. (as on 31.03.17). Non-annualized EPS and RoNW are Rs. 4.75 and 6.03% on equity base of Rs. Rs. 43.99 cr. (as on 30.06.17). Company has converted its entire preference share into equity share as on 12.09.2017 and as on 21.09.17 it’s paid up equity capital stood at Rs. 49.57 crore. Issue is priced at a P/BV of 7.43. If we annualize latest earnings and attribute it on fully diluted equity post issue, then asking price is at a P/E of 26 plus. Thus issue appears fully priced. On BRLM’s front, merchant banker associated with this offer has handled 10 public issues in the past three years out of which 3 issues closed below the issue price on the listing date. As per financials, company's growth is very good, RoNW is 23.75% for last three fiscals and issue is fully priced. But the track record of company is very good, So we give SUBSCRIBE rating to this IPO.
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