#Gold Loan offer# Looking for urgent funds? Get Loan in 45-60 minutes at special interest rate with HDFC Bank Gold loan. 1) Instant money up to 10 lacs. Offered on KYC and no other documents.
2) Term Loan & Overdraft available.
3) No Foreclosure Charges After 3 Months. 4) Lower Rate of Interest 10.5% for Loan > 5Lacs.
5) Gold Jewellery as safe as keeping in locker with HDFC Bank without paying Rent.
Regard’s HDFC BANK GOLD LOAN Chamunda Circle Branch, Opp-Jain Mandir, Borivali- West
I got this message from HDFC Bank. Makes me wonder how will the likes of Manappuram and Muthoot compete with banks or be able to offer gold loans at 10.5%
Requirements for gold loan by Hdfc
Submit any one of the following:
Passport (Not expired)
Driving license (Not expired)
Voters’ ID Card
Aadhaar Card issued by UIDAI
PAN (Permanent Account Number) Card (along with any of above mentioned documents) or Form 60
One Passport Size Photograph
Note: *Loan to be granted for agricultural/business/personal purposes only. Loan cannot be availed for purchase of gold coins, jewels or jewellery, land or any speculative purposes. Loan approval is at sole discretion of HDFC Bank
So many conditions
First go to a big bank then find the proper counter .Then apply .
You might save few hundred rs per month but not many will make so much effort
Most farmers prefer local non branded jeweller in their neighbourhood to get loan
Most of them don’t even reach to Manappuram/muthoot
You probably got this because you have a existing relationship with hdfc bank.
Manappuram or muthoot cater to that segment which is not serviced by these banks, and that segment is quite huge.
Forget gold loan, i have got offers from one of my acquaintance to earn about 5% per month and it seems the takers of such expensive credit is also a huge segment, the end uses of which i dont have a clear idea though and will be happy to learn more about it.
I am an existing customer, but they have displayed flyers with 10.5% interest on gold loan. So, this can’t be exclusive to me. They are giving loans with minimum documentation. Almost everyone has Aadhar these days. Gold is a good collateral. The bank has custody of the collateral (unlike a house or car, which is under the possession of the borrower). The bank has access to cheaper funds. So, it would make lot of sense for the bank to give gold loans to anyone, irrespective of credit history or rating, at 10.5% interest (maybe 11 or 11.5 to those who don’t meet certain conditions). Or so I would assume.
Disclosure: Invested. Manappuram constitutes about 15% of my equity portfolio
Several domestic NBFCs have opted to explore the feasibility of raising debt overseas after defaults at Infrastructure Leasing and Financial Services Ltd in September 2018 caused a severe liquidity crunch in the non-bank lending sector.
In the midcap space as defined by AMFI, I would probably take a bet on the gold finance players Muthoot and Manappuram. These are companies which are delivering between 12% and 18% asset AUM CAGR. The ROA is very strong between 5% and 6% ROA. Stocks are trading close to 2, 2.1 times FY21 price to adjusted book. I would think there is a lot of upside there.
http://www.cogencis.com/newssection/chome/manappuram-fin-waiting-rbi-ok-insurance-foray/
“We are ready to earmark around 300 crores (3 bln rupees) when we enter into insurance. We feel like we need not burn cash because there’s an assured business, there’s an assured premium of around 300 crores annually and the claims ratio is very low,” nandkumar said.
crisil had upgraded its rating on the long-term debt instruments of MAFIL to ‘CRISIL AA/Stable’ from ‘CRISIL AA-/Positive’
Outlook: Stable
CRISIL believes MAFIL’s capitalisation and asset quality will remain strong supported by its gold loan business. The strong earnings will also provide support as the company diversifies into other asset classes and scales up its non-gold business.
Rating sensitivity factors Upward factors
Diversification into non-gold secured asset classes and increase in their AUM share to over 40% without impairing asset quality
Demonstrated ability to profitably scale up the housing and vehicle finance businesses significantly on standalone basis while maintaining asset quality
Downward factors
Increase in consolidated gearing to over 5 times
Steep decline in interest collection in the gold loan business or deterioration of asset quality or profitability in the non-gold loan
Gold loan companies run the risk of applicability of Kerala Money Lenders Act, 1958, for NBFCs in Kerala. The applicability of the Act is contingent on the decision of the Supreme Court wherein the case lies at present. If applied, lending rates could be impacted, and operating expenditure will increase due to the requirement to register each branch with local authorities in Kerala. As about 7% of the gold loan portfolio and 15% of the company’s branches are in Kerala, this remains a key rating monitorable
Very extensive report with conservative target and eps of 19.8 for FY22
Manappuram in a sweet spot .Transforming into a full-fledged NBFC model
AUMs to grow at 20% CAGR over FY20-22E .
Gold Lending Business to grow at 11% cagr
Non-gold lending business to grow at 34% CAGR
They missed the mention of insurance and education sector in which Manappuram will soon enter
l am hoping they will achieve 19-20 eps in fy21
In today’s market where 20% aum growth companies are available at 30 plus PE, manappuram is languishing at 12 PE making it a strong candidate for rerating as it has all ingredients including sector tailwind ,good and conservative management and number two in this sector with good dividend yield
Although Government regulations and geopolitical issues can create troubles
Asirvad Microfinance was acquired by Manappuram Finance Limited in February 2015. At the time, the company’s AUM was around Rs.300 crore.
That’s why it’s important to stay invested with good management as we never know what they will do in future .With positive cash flow many opportunities can be grabbed
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MD Nandkumar hopeful of achieving targeted CAGR of 20% and ROE of 20%
Emphasing more on quality in Microfinance
Putting a cap of 1% for each district
with aim to reduce it to 0.5% to avoid concentration
-Hopeful about growth recovery in vehicle finance
credit rating upgrade by Crisil
-Ashirwad Microfinance enjoys highest credit rating in Microfinance sector in India (AA-)
-Funding and liquidity nil issues
In financials bigger are better, it will grow faster as it grow bigger. For big institutions cost of funds would decrease and attract customers with comparable less intrest rates.
Listen more to Peter Schiff… he is very good…I would be surprised with anything less than a 5 digit price of gold ($/Oz or Rs/gm… doesn’t matter) by the time the current bull market in Gold ends.
5 digit gold price …almost 3x from here seems very very unlikely
But can’t deny the possibility of touching $2000 which will be around 30% up from current price
Curious to see the upcoming Manappuram results
I am expecting EPS of 4 this quarter
The non gold segment is slowly turning around and operation efficiency will slowly move up and this combined with good growth in gold loan segment will be the way to move ahead
Due to liquidity crunch ,most NBFCs are graveyard and it’s giving good growth opportunity to survivors like Manappuram
In India financials and NBFCs have long runway
As these players gets bigger the interest cost of borrowing goes down due to good credit and this kills the small players
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Interesting interview
***[Rahul Bhasin]Managing Partner, **[Baring Private Equity]
Manappuram, for example, it is extraordinary. The company has phenomenal distribution. If you look at the number of transactions it does in a day, it is larger than most banks in the country. And it has distribution around the country. Its return on assets is 5.5 per cent, and if you look at the growth rate, it is almost double of its PE multiple today
But it was a long journey for us. We have been there for a long time, working with the company to increase the platform of different businesses, which have been built over the last five-seven years. It is a journey that takes a lot of investment, takes a lot of patience, but you come out of it on the other side right. You tend to get a lot of returns and it generates a lot of value for all stakeholders.
price-to-earnings multiples are significantly lower than the growth. So you are inevitably going to get PE expansion and the value of the growth that inevitably happens
The revenue has grown by a healthy 9% QoQ and 28.5% YoY while the finance cost is grown by 5% QoQ and 26% YoY.
The gold loan has grown at a very healthy 7% QoQ and 38% YoY - looks like the recent increase in gold price is having a positive rub off on the business.
Noticed significant increase in impairment as well as employee cost - while the impairment seems to be originating from the micro finance business, the increase in employee cost is driven by 2.16 million shares issued as ESOP’s during the quarter .
The profits are above 400 Crore for the second consecutive quarter - notice that at 16000 Crore maket cap, Manappuram’s PE is about 10 times which gives sufficient valuation comfort.
I believe the large FII’s will find comfort not only with the business model but also from the recently concluded international credit ratings by Fitch and S&P.
Excellent results.Crossed 400 cr profit without other income
Last time it was one time income of 47.3 Crore .This time other income is 15 cr .
So in real terms last quarter profit was 375 and this time 401 cr (66% yoy and 6.7 qoq profit growth )
Revenue growth 9% qoq and 28% yoy.
Did they put the NPA numbers for non gold businesses,That will be the crucial thing to monitor
Sharing the results V P Nandakumar, MD & CEO, said, “Our performance so far in the current fiscal is in line with our guidance. All our subsidiaries and business verticals have made worthwhile contributions to the overall performance. We now look forward to a strong finish in the fourth quarter
Average borrowing cost during the quarter decreased by 18 basis points to 9.12 per cent.
Gross non-performing assets (NPAs) improved to 0.50 per cent from 0.58 per cent a year ago, while net NPAs improved by 10 bps to 0.22 per cent.
gross NPA for MFI have increased from 0.86% to 1.34%due to provisioning in karnatka. net npa continue to be nil as company continues to provide conservatively. housing nPA are down and vehicle fin npa are stable. overall, only MFI biz NPA a bit concern, but MFI mgmt mentioned in terms of growth and overall returns, mfi is still one of best biz though overall NPA trend in MFI has increased after demon.
Manappuram is taking euro funds at 5.9% , which is not very cheap .
consider rupee depreciation in 3 years is 10-15 % with respect to dollar or euro , total interest paid will be same as taking loan in rupees at ~ 9% interest.
So I still dont get the rationale in getting international funds (cost of funds will be same as in india)
Note: In international market , some companies are able to get funds at an interest rate of ~3-4%.
Shriram transport recently raised at 5.1% & reliance raised at 3.6 % & 4.12%
