Manappuram Finance


(AvinashMb) #600

Agree but the management has indicated that it wants to do this. I sense because it will be value unlocking for them. My sense is a company which is into too many businesses get discounted a lot more. Anyways when the listing happens we will get Ashirvad shares so on the value it will create value. Am i missing something here ? Would appreciate discussions on the same.


#601

Don’t think they are talking about demerger which will result in share allocation. They own close to 95% and would want to monetise Ashirvad and list it at certain valuation most probably through IPO. There is nothing to unlock here since P&L is fully consolidated and there is no hidden value to discover as such.


(maheshkumar) #602

With adequate capital, improving operational efficiency, company looks well poised to capture growing loan demand of customer. Also due to regular auction policy of company, we expect no liquidity/working capital constraint issues. We also expect Asirvad to return to profitability and group to realize significant cross-selling synergies going ahead. Company’s focus on becoming a diversified player (with regard to product line and geographical-concentration) augurs well in terms of risk management for the company. We expect AUM CAGR of 16% over FY18-FY20E. We value stock at 1.9x P/BV FY20 and arrive at a target price of INR134 giving an upside potential of 34%.

During Q3FY17 and Q4FY17, reports of theft were reported in various branches. Management addressed the concern by deploying more security guards in all branches (3331) which resulted in spike of security expense from 3cr in Q1FY17 to 41cr in Q1FY18. Company has now sought Godrej to install cellular storage technology by which company expects to reduce quarterly security expense to 12cr.


(atishay1) #604

Any reasons for the recent fall? Kerala issue has long been known, not sure if something else is missing here. Anyways to me fundamentals are intact and attractive at current levels to add.

Discl. Invested


#605

There is a peculiar thing that has been bothering me for sometime. This Quinag was “other” category of FII and after it acquired ~10% stake, it became a connected person that too an FPI. what is the connection here? Obviously fundamentals haven’t gone bad to justify this kind of fall. Gold in INR is stable, Kerala loan loss could be very small and manageable for it. In fact the upcoming liquidity squeeze in the wholesale debt market will be net positive for Muthoot and Manappuram due to their superior rating and high capital base.


(Harsh04) #606

The 2017-18 AR shows Quinag to be a FPI even at 6.85% holding.
couldnt understand what you are pointing at …

The fundamentals r only set to improve after their diversification. i feel the current correction is a risk-off play due to kearla floods.


(maheshkumar) #607

Market is not ready to give high valuations to gold loan companies as growth is a concern
Rerating will happen only when growth come back
With other segments NPA could be a concern in future
And also geopolitical and regulatory risks
Need to watch closely next few quarters


#608

During march 2018 it was categorised as “Other” and now it is a connected person. How did this transition happen?


(saumya) #609


Gold loan financers to be least effected as per crisil


(maheshkumar) #610

(atishay1) #611

As per exchanges disclosure, its other connected person.


(vaedermacher) #612

Hi, this may be because, as atishay pointed out, the Company has begun to disclose Quinag as connected entity. As per SEBI definition, a connected entity includes one which has access to non-public material information, which as a fund Quinag may have. Quinag itself seems to be managed by Apax, the global private equity house - https://www.apax.com/news/press-releases/2018/funds-advised-by-apax-partners-to-acquire-healthium-medtech-private-limited/

Disc: Not invested


(maheshkumar) #613

(Vivek) #615

Very good promoter buying is happening in the counter


(Sunil) #616

What is source. I dont see it in https://www.bseindia.com/corporates/Insider_Trading.aspx?expandable=0


(Devaki Nandan Tripathy) #617

You are checking under Insider Regulation 1992. You need to check under Insider Regulation 2015. Please check here.

https://www.bseindia.com/stock-share-price/stockreach_insidertrade_new.aspx?scripcode=531213&expandable=2


(maheshkumar) #619

I think this nbfc crisis is very good for big players like manappuram
1)it will make difficult for many small players to survive
2)new players will think twice before entering this space
3) new players will find it hard to get the licence
4) loan requirement is a never ending story and there will be always a demand
5) As long as assets and liability Ratio is maintained there won’t be much trouble for companies
6) high interest rate will affect the Margin but the volume growth will compensate for that
7)risk reward ratio looks favourable at these valuations


(vignesh) #620

Promoter Again buying shares from open market today. Total 29 Lakh Shares bought in the last 3 days and 35 lakh shares bought in the month of Sep.


#621

Exactly my thought. When I decided to invest in NBFC sector I had tried to mitigate dilution risk by identifying stocks with strong cash flow to generate internal capital. That’s where Manappuram (Gold loan and strong CAR) and Edelweiss (advisory + franchise biz) came into my mind. I realise that the theory is still valid for liquidity issues as well. Many pure play NBFCs don’t have alternate sources of cash flow. Both these stocks will emerge stronger from this so called crisis.


(maheshkumar) #622

True .Nbfc segment is very volatile and there are many regulatory ,geo political and rate/liquidity factors .Smaller nbfc and larger nbfc with poor asset quality will definitely feel the pressure and get the hit.But i think as manappuram is in business since long long time and has good brand in south and has survived multiple shocks in past ,this time I expect the same resilience .