Started in 1955, Sakthi Finance Limited is in the business of asset financing with primary focus on financing pre-owned commercial vehicles. They also provide finance for purchasing infrastructure construction equipment, multi-utility vehicles, cars, jeeps and other machinery. The finances provided are secured by lien on the assets financed. Company's target customers predominantly comprise Small / Medium Road Transport Operators (SRTOs / MRTOs) and primarily hail from rural / semi-urban area. They have identified this opportunity and positioned ourselves between the organized banking sector and local money lenders by offering the finance at competitive rate with flexible and speedy lending services to the customers. Company operates primarily in the Southern region of the country mainly in the States of Tamil Nadu and Kerala through the branch network and customer service points. They have network of 47 branches, located in Tamil Nadu, Kerala, Andhra Pradesh, Karnataka, Maharashtra, Haryana and Union Territory of Puducherry. In addition to finance business, company generates power from windmills and sell the same to Tamil Nadu Electricity Board and Gujarat Urja Vikas Nigam Limited. At present, they have 17 windmills with an aggregate capacity of 5,150 kW located in the States of Tamil Nadu and Gujarat. As on September 30, 2018, they have an Assets Under Management (AUM) (i.e. Stock on Hire) of Rs 92,385.67 lakh. The AUM has grown from Rs 75,035.05 lakh as at March 31, 2014 to Rs 90,161.19 lakh as at March 31, 2018 at CAGR of 4.70%. As on September 30, 2018, the gross NPAs as a percentage of loan assets is 5.72% and Net NPAs as a percentage of loan assets is 3.70%. The Gross NPA as a percentage of loan assets was 5.11% and 4.28% as on March 31, 2018 and March 31, 2017, respectively. The Net NPA as a percentage of net loan assets was 3.32% and 3.00%, as on March 31, 2018 and March 31, 2017, respectively. The capital adequacy ratio, computed on the basis of applicable RBI requirements, as on September 30, 2018 is 16.27%.The capital adequacy ratio as on March 31, 2018 and March 31, 2017, were 17.22% and 19.73%, respectively. This issue is rated ICRA BBB / Stable by ICRA Limited. The rating of NCDs by ICRA Limited indicate that instruments with this rating are considered to have the moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry the moderate credit risk. Average rating, average financials and normal coupon rates with some well known companies offering NCDs at same RoI. So we give NEUTRAL rating to debt issue.
✍️ Post a Comment