About Equitas vs Ujjivan, I tried comparing the two but preferred equitas as the percentage of MFI loans out of total lending is close to 28% as on March 2018. For Ujjivan that figure is much higher. I didnt want too much exposure to a company with predominantly MFI lending and hence opted for equitas.
Converting to small finance bank would improve the borrowing profile of both companies with CASA and retail term deposits likely to be a major driver of reduction in cost of borrowings. Against that the new branch rollouts would entail higher cost to income ratio. Once the newly opened branches start gaining traction and generating more business per branch, the cost to income ratio should moderate going forward.
With public sector banks reluctant to lend and private sector banks not too interested in small ticket lending I think if these SFBs get their act right then these can be an interesting space to be in.
I have never tracked Satin so not much idea about its financials or promoters etc. Main comparision was between Equitas vs Ujjivan. I think a combination of the two could also have been considered but the lower proportion of MFI segment in Equitas tilted the balance in its favour.
@Invest, About all the picks from the NBFC sector there’s nothing intentional. There are other sectors under watchlist but not yet zeroed in on any company.
@Rits I exited SKM recently because having given enough time I could not see the results I expected from the company. While topline growth was good bottomline remained subdued. Plus I felt I was getting better opportunities elsewhere.
@kartiks, I dont have much idea about eris life or its products. But a look at the link u mentioned seems to indicate products which are frequently prescribed by doctors. A lot would depend on how the company markets its products.