Can anybody tell what does it mean ? I mean positive trigger or neutral ?
seems a positive trigger…we should investigate who are the investors? the group of investors who have bought the stake seem to be well experienced. What I could not understand was the background of Red Kite capital…who they are? their background and how are these entities related toe acc other? views invited…
I think background of Redkite capital is not relevant now because it has sold it’s holding to Singapore based ‘‘India Opportunities III Pte Ltd’’
Looks like India Opportunities III Pte Ltd. is the controlling shareholder now. Any clarity on who are they? Is this a long term investor interested in the business or is this a private equity fund or purely a financial investor? What is their rationale for buying TFCIL?
where have they sold? I don’t see that transaction. The India Opp fund holds only 4% while majority (~15%) are held by Red Kite Capital.
Hotel sector has been in cyclical downturn for almost a decade now. So due gradual demand growth and no supply for many years has created a supply demand mismatch. Now hotels are able to increase avg room rent as availability is less. Below is comment from MD of Indian hotels in dec 2017 results release :
“The Industry is entering the strongest upcycle where demand is outpacing supply of rooms. We look forward to benefiting from this growth given our strong network of hotels in India and key gateway cities of the world.”
Tourism finance has a niche business of financing projects in hotels and tourism sector. They have already stated showing improvement in last one year on NPA front. Their NPA peaked to 12.3% in 2016 (credit rating report 2016). In Annual report 2017 , they commented about the asset quality. There are some excerpts :
The subdued macroeconomic environment has also affected the tourism sector and thus adversely affecting TFCI’s sanctions and disbursements and recovery from assisted concerns. Your Company adhered to the prudential norms for Non-Performing Assets (NPAs) as prescribed by the regulatory authority. During the financial year 2016-17, TFCI made robust recovery of Rs.42.33 crore (Principal: Rs.14.68 crore and Interest/other charges: Rs.27.65 crore) from non-performing accounts. As a result the Gross NPAs of the Corporation reduced from Rs.158.85 crore as on March 31, 2016 to Rs.81.12 crore as on March 31, 2017. Further two accounts have been restructured during the year involving a sum of Rs.47.54 crore which are likely be upgraded during 2017-18 after lapse of one year of satisfactory performance which will further reduce the gross NPAs of the corporation. As all these accounts are fully secured your Company is confident of realising the entire over dues alongwith further interest/ principal during the current year. However, TFCI has made adequate provisions in the books of accounts. The Net NPAs of the company as on March 31, 2017 were Rs.43.02 crore (PY Rs.120.89 crore).
Future strategy :
Your company continues to explore possibilities for new businesses and has been on the look out for customers who might have financial requirements for setting up new projects, renovation, modernisation and or expansion. However, to ensure increase in its balance sheet size your Company decided to concentrate on take-over financing of potentially viable projects so as to ensure quick disbursement. Your Company expects ample opportunities in appraisal, advisory services, syndication of debts etc. resulting in non-fund based income for the Company. Besides, TFCI has been actively pursuing consultancy assignments for Private Sector and State Governments and their agencies.
If we see the latest result of dec 2017 quarter , TFCI has posted very good results , Topline growth is 24.5% YOY and Pat growth of 40%.
HDFC securities research report
Tourism Finance Corp - hdfc securities - Jan 2018.pdf (259.9 KB)
Sound sleep providers ..CYCLE is on HOTELS
As per the filing, Satpal Kumar Arora has submitted his resignation as MD.
Looking at entry of recent promoters from BFSI space and now MD putting his resignation this can be a huge sign on possible management reshuffling.
Disclaimer : not invested, in watchlist
Q4 FY2017-18 is not a good qtr. But Redkite capital has given a open offer. which already had stake in the company picked up from open market. The company was a kind of PSU is becoming a pvt company. We can expect a lot of efficiency improvement. Moreover the Sector is in upcycle.