This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind
This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind
This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind
This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind
Premium: IndoStar Capital Finance Ltd: Everstone’s NBFC!
Dated 10 August 19 and Vol.XXVIII No.41
(BSE Code: 541336) (CMP: Rs.287) (FV: Rs.10)
IndoStar Capital Finance Ltd (IndoStar) is a non-banking finance company
(NBFC) registered with the RBI as a sys temically important non-deposit taking company, professionally managed and owned by private equity giant Everstone Capital. IndoStar started its corporate lending business in 2011 followed by retail lending business in 2015. Subsequently, it set up commercial vehicle (CV) finance and affordable housing finance businesses to de-risk its loan book. The results of this diversification strategy are evident in its over Rs.7765 crore loan book. Non–corporate loans constituted 40% of its loan book as at 30 June 2019 v/s 22% a year ago.
IndoStar raised ~Rs.700 crore in May 2018. Despite the tight liquidity conditions witnessed after the IL&FS crisis, it maintained its monthly disbursement target of Rs.550–600 crore. Its asset quality has been resilient so far. However, gross non-performing assets (GNPAs) rose marginally around 2.9% excluding the assets acquired by IIFL Finance. The acquisition of IIFL’s CV finance business last year increase d IndoStar’s distribution network and presence to 322 locations. It also enha nced IndoStar’s capacity to originate up to Rs.400 crore of loans every month. Moreover, IndoStar partnered with ICICI Bank for an innovative structure to ensure on -tap funding for its fast-growing CV financing business. The capital -efficient nature of this arrangement will boost IndoStar’s RoE in this business segment.
In Q1FY20, IndoStar posted 50% higher PAT of Rs.47.09 crore on 86%
higher revenue of Rs.419.06 crore. Total loan assets were 36% higher at Rs.10157 crore. Retail loan assets were 2.5 times h igher at Rs.5850 crore, taking the Retail AUM to 63%.
IndoStar has the potential to become the next ‘Shriram Transport Finance’ of India. It is the first Indian NBFC to be sponsor ed by a leading private equity firm. Its risk:reward ratio seems favorable wi th the stock trading at 1.1x its FY20E book value. Accumulate the stock on dips for 2x returns in the next 3 years.
