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INDOSTAR CAPITAL FINANCE LTD | DEBENTURE ISSUE | Rs. 50 CRORES

INDOSTAR CAPITAL FINANCE LTD | DEBENTURE ISSUE | Rs. 50 CRORES

INDOSTAR CAPITAL FINANCE LTD

Indostar Capital Finance basic information  -

  • 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 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.

SWOT Analysis -

Strength

  • High Quality Loan Portfolio with low rate of NPAs. 
  • Strong SMEs lending Business. 
  • Access to best Industry Practices & Corporate governance Standard. 
  • Promoters includes Institutional Investors. 
  • Higher Capital Base Post IPO, Strong Risk Assessment Team

Weakness

  • The company provides lending to 4 lines of business, i.e., corporate lending, SME lending, vehicle financing and housing financing. (Less Diversification in credit exposure).
  • Factoring in major proportion of wholesale portfolio with high real estate exposure, High Corporate Exposure

Opportunity

  • Company has started diversifying its credit exposure to other areas.
  • Growing Indian market and demand for Credit.
  • Lesser competition as shining of PSUs has become Blur.

Threats

  • Higher Bond Yields Currency Devaluations

Indostar Capital Finance announced that the Debenture Committee of the Board of Directors of the Company vide Circular Resolution #3 / 2018-19 on 25 May 2018 approved and allotted 50 Series XXVI Unsecured, Rated, Unlisted, Redeemable, Non-Convertible Debentures of face value of Rs 1 crore each, for cash at par, on Private Placement basis, aggregating to Rs 50 crore. -Business Standard

Funds raised through the fresh issue will be used to augment the company’s capital base. Promoters of Indostar Capital are looking to sell stake worth Rs 1,058 crore via the offer for sale while other selling shareholders are looking to sell stake worth Rs 85.3 crore. Post the offer, promoter shareholding will fall to 58.95 percent from from 91.5 percent currently. The rest will be held by public shareholders.
 
Brokerage Firms Views:-
  • Arihant Capital - Subscribe 
  • Ajcon Global - Subscribe 
  • SMC Research - Neutral 
  • ICICI Direct - Avoid 
  • Aditya Birla Capital Securities - Subscribe 
  • KR Choksey Research - Subscribe 
  • Mehta Securities - Subscribe 
  • Angel Broking - Subscribe 
  • IIFL Wealth Management - Subscribe 
  • Hem Securities - Subscribe 
  • Choice Broking - Avoid 
  • Antique Broking - Avoid

IPO DETAILS:-

Issue Details –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.Listing At: BSE, NSE
 
If you are new to the world of investing then here is the advice by the - Most Successful Value Investor and Billionaire Warren Buffett.
 
He said that the best advice he got was from his holy bible, The Intelligent Investor, written in 1949 by value god Benjamin Graham. He further said that, "Chapters 8 and 20 have been the bedrock of my investing activities for more than 60 years," he says. "I suggest that all investors read those chapters and re-read them every time the market has been especially strong or weak."
 
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DISCLAIMER :- THIS IS NOT A STOCK RECOMMENDATION

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