Any active members on this thread?
This news about Unity Small Finance Bank, a subsidiary of Centrum is a hugely positive development. The aquisition of PMC bank which was considered a negative is now turning out to be otherwise. Given the background of the promoter JB with extensive senior level positions in top foreign banks, this co can be a force to recon with
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What about other subsidiaries like wealth and broking? They are still loss making. Housing and bank are doing well.
I was just checking their banking app Unity SFB on Play Store. It has only two star rating and very bad reviews by the users. Being completely digital bank they should have a very good app. Any user experience here in this forum?
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I recently interviewed Jaspal Bindra for Cenrum Capital Ltd.
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Centrum Capital
The fundamental business of Centrum Capital Limited (CCL) has evolved from a traditional fee-based financial services firm into a diversified financial conglomerate operating across three main pillars: Housing Finance Advisory, and Lending/Banking.
Primary identity and foundation
Centrum Capital Limited, founded in 1997, is a well-respected financial services group. CCL is a SEBI-registered Category-I Merchant Banker offering a complete range of financial services, including equity capital markets, private equity, corporate finance, project finance, and stressed asset resolution. The company is led by Executive Chairman Jaspal Singh Bindra, who joined in 2016 and steered a strategic shift to a combined lending-plus-fee-generating business model. In FY2023, the parent company converted from an NBFC-ND-SI (Non-Banking Financial Company–Non-Deposit taking Systemically Important) into a CIC-ND-SI (Core Investment Company–Non-Deposit taking Systemically Important), subject to RBI approval.
Core business segments (A-B-C model)
The group operates through a diversified portfolio of services for institutional and individual clients across India and in Singapore. Its activities are organised into three broad pillars: Housing Fianance , Advisory & Distribution (fee-based) and Lending & Banking (credit).
Housing Finance
Affordable Housing Finance: Loans for home purchase, self-construction, and loans against property to low- and middle-income families in Tier-2 and Tier-3 cities through Centrum Housing Finance Limited. Total AUM for the housing Finance division reach to 1627 Crs in FY25 from 1000 Crs in FY23
Advisory & Distribution
Investment Banking: Equity capital markets (IPOs, QIPs), corporate finance (M&A, private equity), debt capital markets (debt syndication, restructuring), and infrastructure advisory.
Marquee Deals (FY25)
₹ 3,500 Cr QIP of Bank of Maharashtra (Book Running Lead Manager).
$239 Million FCCB issuance for Zee Entertainment Enterprises Ltd (Sole Banker).
Advisor on successful ₹4,950 Cr BOT project bid.
Financial Advisor for the ₹7,300 Cr acquisition of Reliance Capital Ltd .
Wealth Management: Distribution and family office services across equity, fixed income, real estate, and alternative assets for HNIs and family offices. ₹45000+ crores – Client Assets Under
Management.
17 locations – Expanded national presence
Stock Broking: Institutional equities (broking and research for FIIs, pension funds, and domestic institutions) and retail broking in equities, derivatives, and mutual funds, increasingly via digital platforms such as Centrum GalaxC.
Alternative Investment Management (AIF): Funds focused on private credit (Modulus Alternative1 s) and venture capital.
Baking
Unity Small Finance Bank (Unity SFB): A new-age, digital-first bank that commenced operations in November 2021 through the amalgamation of PMC Bank, offering consumer, business, inclusive, and transaction banking services.
Major Subsidiary Financials
Segmental Financial
| FY21 | FY22 | FY23 | FY24 | FY25 | |
|---|---|---|---|---|---|
| Sales | |||||
| Banking business | 159 | 785 | 1566 | 2762 | |
| Housing Finance | 68 | 70 | 93 | 175 | 214 |
| Wealth Mangement& Distribution | 120 | 220 | 230 | 168 | 209 |
| Institutional Business | 66 | 82 | 73 | 115 | 142 |
| SME/ Micro credit Lending | 240 | 127 | 0 | 0 | 0 |
| Unallocated | 100 | 145 | 190 | 269 | 278 |
| Less: Intersegment | -94 | -108 | -61 | -87 | -111 |
| Sales Growth | |||||
| Banking business | 394% | 99% | 76% | ||
| Housing Finance | 3% | 33% | 88% | 22% | |
| Wealth Mangement& Distribution | 83% | 5% | -27% | 24% | |
| Institutional Business | 24% | -11% | 58% | 23% | |
| SME/ Micro credit Lending | -47% | -100% | |||
| Unallocated | 45% | 31% | 42% | 3% | |
| Less: Intersegment | |||||
| EBIT Margin | |||||
| Banking business | -50% | -15% | 1% | 0% | |
| Housing Finance | 22% | 26% | 13% | 10% | 12% |
| Wealth Mangement& Distribution | 1% | 23% | 25% | 2% | 2% |
| Institutional Business | -9% | -7% | -42% | -11% | -11% |
| SME/ Micro credit Lending | 1% | -4% | |||
| Unallocated | 28% | -47% | 16% | 16% | -5% |
| ROCE | |||||
| Banking business | -1% | -2% | 1% | 1% | |
| Housing Finance | 4% | 7% | 2% | 4% | 6% |
| Wealth Mangement& Distribution | 34% | 35% | 3% | 3% | |
| Institutional Business | -16% | -72% | -94% | -26% | -24% |
| SME/ Micro credit Lending | 1% |
Sales are increasingly dominated by the banking business, which has scaled rapidly from FY23 onward, while housing finance and wealth management show steady but more modest growth. EBIT margins and ROCE, however, remain volatile across segments, with particularly weak and negative profitability in institutional and SME/micro-credit lending, implying the growth engine is still not translating into consistently attractive returns.
Strategic shift since 2016
From 2016 onward, CCL undertook a significant strategic transformation. It divested its low-margin money exchange (forex) business, Centrum Direct, selling it to Ebix Inc. for about ₹1,200 crore in 2018 and redeploying capital into lending and high-growth fee businesses. It entered banking by securing a Small Finance Bank license in 2021, operationalising Unity SFB and amalgamating the distressed PMC Bank, while integrating earlier SME/MSME and microfinance businesses into the bank. In FY2023, CCL acquired South India-based National Trust Housing Finance (NATRUST), scaling Centrum Housing Finance into a national-level player.
Profit and Loss
| Particular | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue from operations | |||||
| Interest income | 310 | 385 | 944 | 1,727 | 2,485 |
| Fees and commission income | 166 | 237 | 258 | 295 | 349 |
| Net gain on fair value changes | 22 | -11 | 15 | 26 | 90 |
| Income from trading | - | 58 | 84 | 116 | 115 |
| Other operating income | 2 | 15 | 8 | 43 | 455 |
| Total revenue from operations | 500 | 684 | 1,310 | 2,207 | 3,493 |
| Other income | 13 | 20 | 55 | 32 | 168 |
| Total Income | 513 | 704 | 1,365 | 2,239 | 3,661 |
| 0 | 0 | 0 | 0 | 0 | |
| Expenses | 0 | 0 | 0 | 0 | 0 |
| Finance costs | 238 | 330 | 636 | 1,022 | 1,564 |
| Impairment on financial instruments | |||||
| (net) | 17 | 35 | 67 | 111 | 596 |
| Purchase of Stock-in-trade | - | 58 | 84 | 115 | 116 |
| Employee benefits expenses | 196 | 259 | 431 | 576 | 698 |
| Depreciation and amortisation | 19 | 21 | 38 | 71 | 111 |
| Other expenses | 74 | 184 | 287 | 452 | 766 |
| Total Expenses | 545 | 888 | 1,544 | 2,348 | 3,850 |
| PBT | -32 | -184 | -179 | -109 | -188 |
| Tax expense : | 10 | 6 | 4 | -36 | -40 |
| PAT | -42 | -190 | -183 | -71 | -149 |
Total income has grown sharply from 513 in FY21 to 3,661 in FY25, driven mainly by rising interest income and fees, with other operating income also ramping up strongly in FY25. However, finance costs, impairment charges and operating expenses have scaled faster, keeping PBT and PAT negative in every year, with only modest improvement in FY24 before slipping again in FY25, indicating growth without breakeven profitability yet.
Unity Small Finance Bank has a mandatory listing requirement that falls due in roughly three years, prompting management to plan the IPO well before the deadline rather than wait until the last moment. Post-listing, Centrum Capital’s stake in Unity is intended to be reduced from 51% to 40%, signalling both regulatory compliance and value unlocking through wider public ownership.
Centrum Wealth is also being groomed for a future stock market listing, with Jaspal Bindra indicating that the business is expected to list at a date “not too far away.” The franchise is already sizeable, with assets under management nearing ₹45,000 crores, handled by 130 relationship managers across 19 cities, which provides a strong platform for an eventual IPO.
Bindra’s Vision with Unity small Finance
Centrum Group is actively pursuing the long-term goal of upgrading Unity Small Finance Bank into a full-fledged universal bank. In an interaction, when asked whether they are looking to obtain a universal bank licence for Unity, Jaspal Bindra confirmed the intent, stating that they would be very keen to secure such a licence but can do so only after Unity is listed, implying the transition is at least three years away and can be pursued soon after the IPO. This upgrade is described as the final stage of the architectural plan, marking the evolution from a specialised small finance bank into a full-service universal banking institution and positioning Centrum for the next tyre of growth.
Valuation
| Particular | FY21 | FY22 | FY23 | FY24 | FY25 | FY26 TTM | Median |
|---|---|---|---|---|---|---|---|
| P/E | -28.0 | -5.7 | -4.3 | -16.7 | -6.5 | -9.1 | -7.8 |
| EV/EBITDA | 3.3 | -22.3 | 0.1 | 0.5 | -0.3 | 0.0 | 0.0 |
| P/BV | 2.0 | 1.6 | 1.3 | 2.7 | 3.5 | 8.4 | 2.4 |
| EV/Sales | 1.4 | -5.0 | 0.0 | 0.2 | -0.1 | 0.0 | 0.0 |
| EV/CFO | -18.2 | -1.1 | 0.0 | 3.6 | -0.2 | 0.0 | -0.1 |
These historical valuation metrics are distorted because Centrum’s consolidated earnings and cash flows are negative, largely due to losses in the institutional and legacy SME/micro-credit businesses. As a result, ratios like P/E and EV/EBITDA flip into meaningless negative territory, so the right approach is to shift towards a sum-of-parts framework that separately values Unity SFB & Centrum Wealth as they are about list in two or three years.
Unity Small Finance Valuation
| Particular | Unity | Ujjivan | Utkarsh | Suryoday | ESAF | Jana | Indutry PB |
|---|---|---|---|---|---|---|---|
| Book Value | 2,114 | 6230 | 2346 | 1991 | 1749 | 4280 | |
| Mcap | 3553 | 10,468 | 2,870 | 1,466 | 1,359 | 4,663 | |
| Price to Book Value | 1.68 | 1.68 | 1.22 | 0.74 | 0.78 | 1.09 | 1.21 |
| ROE | 23% | 12.40% | 0.79% | 6.16% | -23.50% | 13.00% | |
| @51% Holding | 1812 | ||||||
| Centrum Mcap | 1328 |
Unity Small Finance Bank is showing the highest ROE among listed SFB peers (23% vs 12–13% for Ujjivan and Jana, and low/negative ROEs for others), so benchmarking its valuation to the sector leader Ujjivan’s 1.68x P/B is reasonable. Applying 1.68x to Unity’s book value of 2,114 implies an equity value of about 3,553; Centrum’s 51% stake is then worth roughly 1,812, which is higher than Centrum Capital’s current market cap of 1,328, indicating about a 36% holding-company discount even before assigning any value to wealth management, housing finance or advisory businesses.
Centrum Wealth
| Particular | Centrum Wealth | 360 ONE WAM Ltd | Nuvama Wealth | Motilal Oswal | Edelweiss Financial |
|---|---|---|---|---|---|
| Revenue | 166.8732 | 2,914 | 6,210 | 4,206 | 1035 |
| Profit | 5.8414 | - | |||
| NPM | 4% | ||||
| AUM | 38000 | 295000 | 20283300 | 187000 | 142560 |
| Yield | 0.44% | 0.99% | 0.03% | 2.25% | 0.73% |
| MCAP | 146 | 46373 | 26074 | 53379 | 9950 |
| PE | 25 | 41.1 | 25 | 26 | 23 |
| AUM/Mcap | 260.21 | 6.36 | 777.91 | 3.50 | 14.33 |
At a peer-like P/E multiple of 25, Centrum Wealth’s implied market cap of about ₹146 crore looks conservative given its AUM of ₹38,000 crore and positive profitability, translating into an AUM/Mcap of roughly 260x versus single-digit to low-double-digit AUM/Mcap multiples for listed wealth peers like 360 ONE, Motilal Oswal and Edelweiss. This suggests substantial upside optionality if the business is eventually listed or monetised at valuations closer to the broader wealth management peer group
Investment thesis
At the current market cap of ₹1,328 crore, the sum-of-parts for just Unity (₹1,812 crore attributable value) and Centrum Wealth (₹146 crore) already exceeds the quoted valuation, implying around ₹630 crore of “unrecognised” value. In effect, the market is ascribing zero—or even negative—equity value to Centrum Housing Finance and the institutional/advisory businesses, meaning an investor today is getting these segments for free within the holding-company price.
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Hi, I have tried to value Centrum Capital and just seeking yours Opinion
Hi,
I have been tracking Centrum from a while now. I think the company is available at a great price considering Promoter has infused 200Cr throught warrants at 28.52.
I think the market was expecting a deal from BharatPe side in Unity SFB as they were actively looking for a buyer, currently the deal seems shelved as of now which is maybe resulting in drawdown in share price.
Also, the company is really poor in terms of providing disclosures. The company has acquired Aviom Housing Finance for 977.5 Cr in Unity SFB which requires a disclosure imo.