Satin Creditcare Network Ltd - Reaching out!

If thats so its a great opportunity for investors who are waiting for lower prices. Personally I dont subscribe to such conspiracy theories.

PS: Company listed on 27/28 Aug 2015. My unertsanding QIP can be done after one year. So first week of Aug is unlikely.

1 Like

Hi,

I think the question, or rather confusion is, what is driving the share price up so high, on a rather frequent basis? I donā€™t mind it going up (I hold a few shares), but I also want to know the cause of such a sharp movement.

Oh yes, it will be the first week of September and not first week of August.

Also, this is not a conspiracy theory. :smile: Just a theory I guess

Maybe undervaluation compared to SKS micro, Ujjivan and Equitas?

@akhil
Thats my view, valuation discount reducing. I have flagged this before in posst so didnt want to repeat. Essentially FY16 and FY17 BVPS will be similar for SKS and Satin. Easy to see discount. SKS is higher ROE and Satin is higher growth. Discount is investor call.

@deebee
unless growth collapse or credit costs spike there should be only time correction (in a flat market)

3 Likes

Hi
harry4u9 http://forum.valuepickr.com/users/harry4u9ā€¦Sorry to hear you
missed buying Satin. Never mindā€¦ There is nothing called opportunity lost
in stock market. You may probably land in some other stock early on in the
bull run and we may miss itā€¦

Pls find attached Axis bank report on microfinance industry.
MicroFinanceIndustry_Thematic_25072016.pdf (1021.6 KB)

3 Likes

MS keeps buying

27-Jul-2016 SATIN Satin Credit Net Ltd MORGAN STANLEY ASIA (SINGAPORE) PTE BUY 4,00,000 662.79

4 Likes

Shore Cap Ltd sold 200k shares at 652 today.

PE and VC type investors gave time restriction on capital deployed and have to return money and show exits. Shore has been selling for a while to the new set of investors.

Example was Equitas IPO too:
Equitas Holdings the biggest IPO during 2016 so far also had a substantial OFS component. The company raised 2,176 crore of which1,456 crore was on account of complete exits made by six PE players including Sequoia Capital, WestBridge Ventures and Aquarius Investments.

Planning to attend Satin AGM tomorrow in Delhi.

Any queries on Satin?

Please do share your notes from the AGM once you get sometime

Is there a pressure to decrease interest rates given that SKS and Bandhan have set the precedence?
What is the progress on cashless transactions?
What has been the response to product lending (solar lantern, sanitation)? Are there new products in the pipeline?

Hi Vivek,

I would have the following questions if you get a chance, thanks:

  1. AUM growth - what is the 3/5 year cagr expected? Split between no of customers, ticket size and duration of loan
  2. Scale benefits
  • credit rating improvement - when and by how much is expected?
  • Given we are at the low end of opex/AUM how much more can we improve?
  1. ROA and ROE target for FY18/19/20 - assuming bsuiness is sufficiently scaled by then

  2. Normal level of leverage targetted?

  3. BVPS growth. Since lareg capital raises will be required frequently whats the policy on timing - do you target a certain P/BV valuation (minimum level)? What do you estimate BVPS FY18 end?

  4. Any worry on the ground level owing to UP elections? Any risks we should worry about?

  5. Benefit on PSL sell through once competitors become banks and supply gets restricted - will this show up in higher magrins?

  6. Why are you thinking of becoming a bank (recent interview) when it appears ROA and ROE should be better as MFI?

Enclosed are my observation from today AGM meet at Satin .We met CFO Mr Jugal Kataria and Mr Runveer,CS

  1. Opp size remains huge and was estimated to be 2.5 lakh Crore 10 years back.It would have grown further since then .Total market size of all MFIs operating in India remains around today is approx Rs 55000 cr implying good growth in years to come.

  2. Satin remains confident of growing at 30-40% CAGR for next few years and not perpetual growth .

  3. The audit system of satin are very strong leading to low NPAs .All branches and ROs are audited every 3 months and staff regularly rotated.

  4. Rating will improve once QIP happens after August based on 2 week average price and will be done at a price that is WIN WIN for all parties concerned.The fund infusion happens every 18-24 months.
    .

  5. Satin differentiation remains its Geographical presence.Its the leading player in UP,Bihar,Punjab,J&K,Ukhand. UP opp size is massive with ts mostly rural population base of 27 Crore.

  6. Satin has been operating in UP for last 8 years and has remain unaffected by several elections including MLA,municipal,Panchayat melections. &are confident of remaining unaffected by next year elections.They have reduced overall share of UP from 60% few yaers back to 40% now by diversifying in other geographies.

  7. Microfinance body is in talks with RBI to cap borrower 2 MFIs limit and overall cap as more MFIS convert into Small banks.

  8. Advent of credit bureaus specializing in MFI like Equifax and High Mark is helping them a lot in analysing borrowers profile and checking the NPA.This will be further strengthened by Aadhar based lending .

  9. They have tied up with Itzcash for cashless transactions which are now 10-12% of overall transactions and will further increase.

  10. AS more Jandhan accounts gets opened They will try to transfer the funds directly in the members accounts.As most of members are ladies they are being encouraged to bank account in their names.Banks dont have the capacity to disburse n monitor 10-20 K loans to individuals and MFIs strength lies in catering to these very segment.

  11. The BC subsidiary tarashna which was opened separately as per the prevalent regulations at that time is being merged with Satin. Its topline is around 350 Cr and used to share 10 & of its topline as profit with Satin.

  12. GOI is heavily supporting the financial inclusion theme by disbursing loans to MFIs under Mudra scheme and bring the large swathe of population in mainstream.

  13. Roa is expected to improve after QIP though RoE may go down a bit due to pending equity dilution.Satin expected to get PSL loan disbursal benefit as more of their competitors convert into banks.

  14. Satin is also starting SME loan segment both secured and unsecured thus opp size further increases

Demand supply gap remains huge for MFI sector as well as opp size.Even if 20 more MFIs come up the opp size will be quite high.

27 Likes

The recent news about satin

2 Likes

Thanks Vivek for the effort and detailed notes

Morgan Stanley Asia appears to gave increased stake to over 5%
http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/C7F0C9AB_6E3B_4A73_937C_992AD60C6103_135457.pdf

2 Likes

@v4value This is a Pnote. We donā€™t know who the actual holder is.

Morgan Stanley Singapore is also an investor. Does anybody know if MS SGP is a Pnote or the Hedgie/Prop Trading Desk of MS?

1 Like