MAS Financial Services Limited a Gujarat-headquartered NBFC with more than two decades of business operations and as of June 30, 2017, the company has operated across six States and the NCT of Delhi. The companies 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.
The companies Promoters have significant operational experience in the financial services sector in India, and the shareholders include development finance institutions including FMO and DEG and private equity investors including Sarva Capital.
MAS Financial Services is a Gujarat based NBFC (Non-Banking Financial Company). Company operated across six States and in Delhi through 119 branches. As of September 30, 2016 Company had more than 530,000 active loan accounts and 3,200 Customers.
ISSUE DETAILS
Issue Open : 06th October, 2017
Issue Closes : 10th October, 2017
Issue Type : Book Built Issue IPO
Face Value : Rs 10/ Equity Shares
Issue Price : Rs.456– Rs.459/ Equity Share
Valuation : Rs 460 Cr.(Approx.)
Market Lot : 32 Shares
Minimum Order Quantity: 32 Shares and in multiples
Listing At : BSE, NSE
ISSUE OBJECTS
The Company proposes to utilise the proceeds from the Fresh Issue towards augmenting its capital base to meet future capital requirements.
The Selling Shareholders will be entitled to the proceeds of the Offer for Sale.
COMPANY PROMOTERS
Mr. Kamlesh Chimanlal Gandhi
Mr. Mukesh Chimanlal Gandhi
Mrs. Shweta Kamlesh Gandhi
INDUSTRY OVERVIEW
The Indian economy is one of the largest economies in the world, with a gross domestic product (“GDP”) on purchasing power parity basis of an estimated US$7.99 trillion in calendar year 2015. Per capita GDP in India has grown from an estimated US$5,500.00 in calendar year 2013 to an estimated US$6,200.00 in calendar year 2015. (Source: World Factbook, available on https://www.cia.gov/library/publications/the-world-factbook/geos/print_in.html). The RBI has stated that India’s GDP was 7.60% in Fiscal 2016 against 7.20% in Fiscal 2015. (Source: Reserve Bank of India Monetary Policy Report – October 2016).
Companies operations and financial performance in the periods specified:
VALUATIONS
As far as Valuations are concerned the IPO seems undervalued valued (in comparison to industry PE) with a P/E of 29.95x at the upper price band and 29.75x on lower price band on consolidated basis, on upper price band on standalone basis P/E stands at 30.43x while on lower price band it’s 30.24x. (As per Diluted EPS ).
#Alternatively if we see P/E on taking average EPS both on Consolidated as well as Standalone then we find it @34.95x & 35.60x respectively(Both @ Upper Price Band)
EARNINGS PER SHARE
As per Standalone Financial Statements
As per Consolidated Financial Statements
INDUSTRY P/E RATIO
PEERS COMPARISON
RoNW
As per Standalone Financial Statements
As per Consolidated Financial Statements
RESTATED STANDALONE FINANCIAL POSITION SUMMARY
RESTATED STANDALONE STATEMENT OF PROFIT & LOSS ACCOUNT
RESTATED CONSOLIDATED FINANCIAL POSITION SUMMARY
RESTATED CONSOLIDATED STATEMENT OF PROFIT & LOSS ACCOUNT
ANALYSIS & SUBSCRIPTION SUGGESTIONS BY AUTHOR
The resolving issues of NPA’s by the RBI and the steps taken by it, has not only resulted in cleaner balance sheets of banks but has also boosts the NBFC space in India which gives this sector a bright future. Also what we are expecting is NBFC space will boost in next 5 years of time period.
Although we may consider this as a positive thing but we have few major positive as well as negative thing to consider before rushing to put money in the company:
Valuations: Valuations are important aspects here we have seen PE ratio of 29.95x considerably @ Upper price band, and the recent Industry PE is 41.51x (As per data provided in RHP) this makes us positive in this aspects as we can see certain portion of growth in it. And on comparing with peers the company is expected to have only second lowest PE in this sector after SHRI RAM CITY UNION FINANCE LIMITED,
RoNW/EPS: The company has posted consistent rise in EPS over the years while it has also shown consistent decline in RoNW over the years but even after this decline the company has highest RoNW in comparison to its already listed peers.
CAGR: Companies AUM increased at a CAGR of 33.37%, from ₹ 10,531.91 million from March 31, 2013 to ₹ 33,325.65 million in March 31, 2017, and the Return on Average AUM was 3.16% in March 31, 2013 to 2.34% in March 31, 2017.
Earnings: Companies earnings have seemed to be promising as it have consistent growth in “Revenue From Operations” over the years which is necessary for any business to run exponentially over the years.
We have already seen so many plus and negative things but on the verge of overall sectors bullishness and perfect valuation in comparison to its already listed peers one can subscribe the issue.
*Disclaimer: Author may or may not have interest in the issue, before getting to conclusion consult your Financial Adviser. The Author shall not be responsible for any kind of loss of gain arising out of any investments. All data was taken from RHP filled to SEBI by the company.
MAS Financial Services Limited a Gujarat-headquartered NBFC with more than two decades of business operations and as of June 30, 2017, the company has operated across six States and the NCT of Delhi. The companies business and financing products are primarily focused on middle and low income customer segments, and include five principal categories:
MAS Financial Services Limited a Gujarat-headquartered NBFC with more than two decades of business operations and as of June 30, 2017, the company has operated across six States and the NCT of Delhi. The companies business and financing products are primarily focused on middle and low income customer segments, and include five principal categories:
