AKME Star Housing Finance co got recently listed at BSE SME.
I liked the company because
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BV 28 and CMP 30
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Marketcap of only 18 Crores
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One of the few listed HFC which is focused on non salaried class which is 85% of total opp size
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Very well educated promoters one is mr ML Nagda CA,CS,ICWA,Phd and LLB and other is Nirmal Jain CA founder of AKME Group.Mr Nagda was legal compliance head at HZL,Udaipur and ventured on his own once it was privatised in 2005.
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Very good execution track record of AKME Group of 18 years.They are one of the 2 NBFCs allowed to take deposits from public in Rajasthan by RBI .have a depositholder base of 50,000/- and are operating these NBFCs since 1997.
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Very good reputation amongst region of Udaipur and and amongst their Jain community. Infact AKME is named after their Jain Guru Acharya Kumud Mani.As can be seen from above video promoters are very humble down to earth people but very confident,focused and with ambition.
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Most of the money in IPO was invested by their deposit holders and acquaintances who are known to them.IPO was for only 4.8 Cr INR and they will not let them down
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NHB Supervision and license given by it 5 years back.Now its very difficult to get a license from NHB and surely value of license itself will be more than piffling market cap
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However the co has so far not taken much loan from any bank and activities have remained small.
This is a small lottery type of investment which can very well turn out to be a 10 or 100 bagger in few years if execution is good as opportunity size is big and in a small co the bet is only on the jockey.Its the first IPO from the AKME group who have a good reputation .
Issue is of liquidity but as Ian Cassel says dont worry about illiquidity but worry about being right. Lot size is 4000 shares.Its listed in MT series of BSE.
It may get listed at mainstream BSE in 2 years then the fireworks will start.But Market maker is present who provides some liquidity as mandated by BSE .
Disl- Invested since IPO
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Company is earning a revenue of 1.26 Crores on a loan book of around 10 Crores - isn’t that too low an interest rate of around 12.6%?
10% of the Long terms loans are sub-standard and below sub-standard.
Futher, the company itself has borrowed around 2.8 crores and paid an interest of around 38 lakhs, i.e. borrowing at around 13.5%. NIM is comes out negative then.
Did the basic calculations based on the financials in prospectus: http://www.sebi.gov.in/cms/sebi_data/attachdocs/1424240973438.pdf
So far it seems focus of promoters was not on HFC business . However once NHB asked them to put in more equity and become serious otherwise they lose license they. got equity from friends and relatives and also came with an IPO.
SO far the focus was on NBFC and also on two wheeler financing business. But now the attention should turn on HFC as it being the first listed player from group.Results for last year will be announced this month.For SMEs results are announced on 6 monthly basis.As the base is low and focus is coming back results should be good for next few half yearlies.
The NPA track record at their NBFC Akme Fintrade and fincorp seems good inspite of it being in 2 wheeler finance business as its running nicely since 1997 and has not closed down like thousands of NBFCs.They collect payment on daily weekly monthly basis through their seto femployees and partners on commission basis.
I had spoke to their competitor in Rajasthan SRG Housing finance who also praised them profusely.Similar was reaction from lot of udaipur based local people in the same field who also praised them.
I have taken a small 1% bet with atleast 2 year POV when it will list at BSE like its competitor SRG listed.
Thanks Vivek,
How to buy if not listed on BSE/NSE, Pls help, What is the process and is it manadatory to then again get listed on BSE for any co listed on MSME exchanges
one can buy and sell stocks like any other stock at BSE except its listed under MT series .Akme code is ASHFL but the catch is lot size of 4000 shares and poor liquidity.One should be ready to hold it for atleast 2 years until it lists at BSE.
However there are some good cos listed at BSE SME like ADCC,Ashapura Intimates,Dhabariya Plywood,Momai, etc having good liquidity too.
Hi Vivek,
I hold demat account in icici direct. When i try to put a buy order the scrip name is not available and i reached the icici direct customer care department and their immediate reply is i can’t buy shares which are not listed either in NSE or BSE.
How did you buy, which brokerage do you have account.
yes its surprising that icici is not allowing you to buy.
you contact them on phone and ask to execute the order .if not escalate the matter to md.
otherwise you may hv to open a new account with any broker who executes bse sme orders.
bse sme is a good hunting ground for buying scrips which are good and expected to move to list to main stock exchange . eg tiger logistics,ashapura intimate,momai, dhabriya plywood,adcc and ohers which u may like to analyse.
Where do you have demat account? because previously also in one another company i want to invest i faced the same issue with icici direct.
How is the company planning to grow? What is there current footprint in terms of customer base?
AKME is having a customer base of 50000in their NBFC business in the enclosed video itself who can be easily targeted.Mortgage GDP ratio is abysmally low at 8-9% vs 80-85% in developed world.
AKME is a leading name in Mewar region of name and have good reputation .
But its better to buy a tracking qty and buy more if execution is there .
HDFC Securities is giving option to buy.
Gross NPA is 2.09% and Net NPA is 1.59%.
Worse than any Housing Finance Company in this list:
Canfin Homes thread
Is this to be expected of small companies?
or they’ve not made new loans in many years and accumulated these NPAs over many years?
The P/E is 28.5, P/B is 1.23, RoE is 4.33% and RoA 5.33%. Not even leveraged 1x!!
Growth in topline and bottomline is there but focus so far was not there on HFC business.
Lets see how execution happens in future which is the most imp criteria for any microcap.Bet is on Jockey and execution.Co is just starting this journey.We have to give them time.Opp size is there.
HI Vivek,
I had invested in SRG Housing Finance the day they migrated to mainboard and then sold at some profit. What do you think about the company? Is the management competent and honest? …
They have another company, “SRG Securities”, listed on BSE SME. Do you have an idea of the prospects of this company?
Thanks!
~Pranav
To be honest not much idea about SRG but I had spoken to them about promoter credentials of AKME before applying in Akme IPO.
Thhey had given positive feedback about AKME which was a valuable feedback as both are based in same region and are targeting the same set of customers.
YOur take on SRG and reasons for buying it and business prospects please.
hi vivak can buy cmp 35.50 for longterm
Hi Vivek,
SRG was a trigger happy investment for me. They had equity of about 10 crores, which one would expect them to leverage. plus it was the first day that it traded on main-board. Even after raising 30 crore loan from SBI to lend, they did not open full fledged branches. They continued to operate via satellite offices and the head-office which is promoters property that company has taken on rent.
It was fastest and smallest trade that I have made in some time. I would not call it an investment.
Thanks Pranav.Missed your response somehow.How is SRG performing after listing at main BSE interms of volumes and performance?
It has been stable on BSE mainboard. However, for small companies, we have to look at the management integrity and capability apart from their industry of operations. I would review this company if I have some clarity on management.
