ValuePickr Forum

Capri Global Capital-Yes your money matters!

Capri Global Capital.

Market cap= about Rs 600 crores

P/E=about 7 (considering TTM)

P/B=0.63


Noticed this company in some ones portfolio on Valuepickr and did some work, a very small effort by an engineer. Just an initiation, would expect a detailed discussion.


Background of company: It is erstwhile MoneyMatters for those who remember 2010 Housing Finance Scandal. The CEO was arrested by CBI for alleged bribing of PSU bank executives. Would like to caution that the earlier promoter Rajesh Sharma and associates still own about 25% of the shares.

But story seems to have changed now and looks like a turn around story, Capri Global partners, a US based real estate investment group has taken the control of the company and now owns about 50% of the shares. Its chairman Quintin E Primo III is now Non Executive chairman of the Capri Global Capital India and is very serious about leveraging the expertise of Capri Capital to grow Capri Global India. And has been a successful international investor.


Quintin E Primo III a 1st generation entrepreneur is a Harvard MBA, built Capri Capital with a few others Harvard /Kellog/Wharton MBAs. Their background looks very solid.

Primo had a humble beginning and has grown Capri brick by brick. From what I have read and watched about him so far, have been impressed and he sounds like a very ethical person.


Capri Global has transitioned from fee based Investment advisers to a Lending organisation / a full fledged NBFC. One interesting aspect of Capri Global India is, its networth is about Rs 970 crores and no loan.

They have 3 verticals of lending , SME lending(Rs 280 crores) , Wholesale Lending (Rs 505 crores)and now they are planning to finance affordable housing.

Whole sale lending consists mainly Residential real estate.

Their CAR is 94% compared to 15% of the regulatory norm hence they could borrow multiple times their current loan book, so huge potential. Technically they could stretch their loan book by another Rs 6000 crores. They have aggressive plans of expansion in tier two/three cities in next 2 years. The average age of the employees is just 31 years and there are only 145 employees.

The major risk and concern is Mr Rajesh Sharma is on board and holds about 25% of the company shares. Dont know whats the future strategy of the Capri Global, can a Foreign company own more than 50% in the NBFC? what is the regulation?

Now, how will they manage borrowing funds with history and legacy of MoneyMatters?


I am naive in finance but will table some of the financial details below. I know may of you have very fine understanding of financials. Please contribute and advise if its worth investing.

Year Networth (INR cr) AUM (INR cr) CAR (%) NP(INR cr) NIM (%) Net NPA (%) ROA (%) D:E
2013-2014 976 736 93.00% 82 100.00% Nil 8.40% 0
2012-2013 900 426 116.00% 76.6 100.00% Nil 8.51% 0
2011-2012 829 370 130.00% 40.85 100.00% Nil 4.93% 0

Since it has very recently transitioned into a lending company from Investment adviser company the above financial numbers may not make much sense. But to what extent the book value is real? and can this company manage to become a wealth creator Under Capri Capital Partners? Views invited.

Disclosure: Considering an investment.

Hi Vinod, have you happened to look at it ever? What do you think? too risky an investment considering the history oh Mr Rajesh Sharma?

Thanks-Mahesh

You were right about the new management being solid. I like the fact that they have an amazing executive director, a former IAS officer and a judge and the lady from insurance department on the director list.

Rajesh Sharma still seems to very involved from what I could gather from his presence in every board meeting and is holding a large chunk of the company.

Will be reviewing the financial statements in more detail in upcoming days.

Disc: Just invested a small % of portfolio, might increase overtime.

1 Like

Sarthak, agree, I also saw the details of board meetings, Rajesh Sharma and his brother (??) are regular and dont know to what extent they are involved in operations, thats been a unsettling factor since I have started following it. Had written to the Capri Capital in Chicago to understand the direction they are headed and plans. Havnt heard back. Will forward same email to Capri Global India and see if I get any reply. Have bought few shares and am interested to buy more.

Generally volumes are very low. Free float is also very low.

Thanks-Mahesh

Rajesh sharma has significant interest in the company -25% so its not surprising if he attends all the board meetings.

I think the more important factor is the integrity and efficiency of Capri global as promoters.

The fact that Rajesh sharma had stepped down from CEO after the acquisition by Capri Global does indicate that the mgmt is not being controlled by him.

Also in the AR , his position is mentioned as Promoter Director and not executive director, will need to check again if he is drawing salary.

There is no message from him in the AR and I believe the promoters Capri Global are not relying on him to run the show.

Also, in present position with Capri Global holding about 47 % majority stake, i don’t think it will be easy for him to siphon out the money unless Capri is also involved, the possibility of which appears less to me.

All in all, at this price it appears like low risk.

Disc : invested

1 Like

Manish good to know that you have invested, for a few days I thought I am trying to be adventurous, a bit relieved. 13-14 Annual report doesnt have any mention of Rajesh Sharmas salary for this year which might suggest he is officially not involved in operations. If I look at the events, as soon as Capri Capital came on board Rajesh Sharma stepped down and Ravikumar became executive MD, this year Ravikumar was replaced by Sunil Kapoor which I think is call from Capri Capital (only my guess).

I was hoping Capri Capital would respond to my earlier email, may they wouldnt. I will do some more work and write again to Capri India.

By the way, happened to stumble upon their Job postings , they are hiring pretty aggressively.

Thanks-Mahesh

Link to 2013-14 AR -

http://www.cgcl.co.in/images/Downloads/Annual%20Report%20-%202014.pdf

Page 12 and 13 about the directors and page 21 about outlook of the company look positive.

Disc: Invested.

Can anyone explain why their Operating cash flow is negative for so many years:

Narration Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14
Cash from Operating Activity -43.88 111.72 -14.31 -105.04 -161.69 -59.27 -102.33

Hi Mahesh,

How did company’s sales come down sharply in june 13 quarter, while it maintained the bottomline? Can you please throw some light here?

Oh, I think their accounting method changed. They were not pure NBFC earlier so my guess is they would show entire loan book as revenue, now they could be showing only Interest income as revenue. For more clarity compare last 4 quarters.

Thanks-Mahesh

Thanks Mahesh. Last few quarters had me interested, that’s why I asked. Do you have any idea about the quality of lending? What is the percentage of NPA?

Company today came out with 2nd quarter results. The bottomline has grown by 29% YoY, which is in line with the last few quarters.

Results for this quarter look very good. NetIncome is up 42% YOY and Net Profit about 30%.

However other expenses is up about 77% and Tax is up 47% YOY.

Net Income increase over June quarter indicates their disbursals have traction.

But market is not so happy about the IT Dept Inspection.

Disclosure: About 10% of my PF, averaged at Rs170. in last 1 month.

One needs to understand why Mr. P H Ravikumar who was appointed MD in April-13 left the the Company in Jan-14. Also some feedback on Mr. Sunil Kapoor who is the current Executive Director will be helpful in gaining confidence.

Touched a 52w low today for apparently no reason. Or maybe there is a reason? Anyone knows?

Disc: I’m long

i believe when a stock keeps falling to lows and is available at ridiculously cheap then most of the time it is due to corporate governance issues and retail investors are the last to know about it.

Disc - invested and waiting for results

There are two news items in the past few days, but both seem irrelevant to me

http://www.chicagobusiness.com/realestate/20150331/CRED03/150339952/eyeing-expansion-capri-capital-restructures

Results are out! http://www.bseindia.com/xml-data/corpfiling/AttachLive/01820CA5_D046_4EA5_8686_00604A583F7A_141727.pdf

I bought a bit during the recent fall, but now my only regret is, why didn’t I buy even more when it was down below 130 :stuck_out_tongue:

Decent results by the company and did just a comparative analysis with cholamandal finance with EPS nearly 29 it is trading at 600 and capri global with EPS of 27 is trading @160 levels. There is huge valuation gap.

Don’t have position and considering to create a small position.

AR for FY 15 is out , some observations

  • The Company has 2 segments - Wholesale lending to real estate players primarily for residential projects and MSME which they started in 2013. Last year Company had mentioned affordable housing as an attractive segment but this AR has no mention of same.
    The WL was stagnant but MSME is showing good progress.
    My guess is real estate segment is passing through tough times and hopefully the company is exercising caution on this segment.

  • Gross and Net NPA was 0.98% and 0.88 % which is down from 5.43% and 4.92% of last year. They had not mentioned these fig in last AR.

  • From seven locations company has expanded to nine locations. Bengaluru and Chennai were added. They had mentioned in previous AR to expand to 20 locations in 2 years, seems highly unlikely.

  • Loan Book - 951 cr ( 736 cr),( growth of about 29%)
    Net worth - 1130 cr ( 970 cr)

Loans disbursements to MSME - 305 Cr ( 242 cr)
MSME loan book - 446 cr ( 231 Cr), ( loan book growth of 93% for MSME)
Avg ticket size - 79 lacs
600 MSME customers ( 330 )

Loans disbursements to WL - 210 Cr ( almost same)
Loan book - 505 Cr
Avg ticket size - 25 Cr

Capital Adequacy Ratio - 89 % ( 95%)

Promoters Capri Global have increased their stake by almost 5 % in the last financial year.
Company had operationalised 5 new branches for MSME.

The Comany had created provision for a Floating Charge of Standard assets ( i dont know what it means, i understand it is to cover your a-- if borrower turns out to be vijay mallya). Provisions have increased from 5.3 Cr to 12 Cr leading to reduction in profit reported.

The increase in revenue / profits is less than what I expected, since they had low base and very high CAR, but the good factor is NPA has come down drastically ( bad thing is they didn’t report in previous AR).
Another good sign is that promoters have increased stake.

The MSME segment is bigger than WL now. I expect them to post atleast 30% growth in revenue and profits this year assuming that MSME will continue to grow ( but then i expect a lot of things !! ).

In any case the stock is trading very cheap and the only thing which can pull it down or stop it from advancing is Corporate fraud / misgovernance.
Capri Global already have experience in Finance and the Executive director seems to have good professional background and I could not find any evidence against Capri Global. Rajesh Sharma is a Non executive director. Plus the financials seem OK.

Disc - Invested. Views are biased. Not a buy or sell recommendation.

2 Likes