First, what I didn't like about this small NBFC - eyesores right from the first look
a) High Promoter shareholding pledging
b) Very frequent dilutions - every year from 2007, except 2010 - couple of times have been big
But since that casual read of the 2012 AR (please start with that rather than for 2013) why can't I shake of the feeling that this is one NBFC with a difference - certainly difficult for others to replicate the expertise and relationships that Intec has built for itself in its niche.
Let's start examining why?
THE INTEC DIFFERENCE
Intec Capital is among few companies to haveset its sights exclusively on Indiaâs SME space.Currently, there are over 26 million MSMEs inIndia, but only 5%-7% were serviced by banks /FIs / NBFCs on account of limitations in reach.
At Intec, our focus is to service the remaining93% by addressing their financial needs and actas partners in their growth.Within what is largely an untapped market,Intec emphasizes the financing of machines forhigh-growth industries like Auto & Engineering,Printing & Packaging, Plastic & InjectionMolding, Medical, Healthcare & Pharmaceuticalsand Food Processing.
SMALL ANDMEDIUM-SIZED BUSINESSESARE THE LEAST PROVIDED FORWHEN IT COMES TO THEFINANCING OF THEIR MACHINERY& EQUIPMENT REQUIRED TO GETTHEM INTO BUSINESS ANDSUBSEQUENT EXPANSION.
INTEC CREATED AN ENTIREBUSINESS MODEL AROUND THISOPPORTUNITY. THE COMPANYEMERGED AS A FOCUSEDMACHINERY & EQUIPMENTFINANCE PLAYER IN INDIA,CARVING OUT A NICHE IN THECOUNTRYâS GROWING SMESECTOR.
Intec, headquartered in New Delhi (India) has a presencespread across 15 locations in Northern, Western and SouthernIndia, covering more than 137 SME clusters across a broadindustry spectrum.
Intec Capital | FY2010 | FY2013 | CAGR |
---|---|---|---|
Disbursements | 175.91 | 615.45 | 52% |
Assets under Management | 146.97 | 871.02 | 81% |
Revenues | 15.07 | 115.46 | 97% |
PAT | 2.03 | 13.14 | 86% |
Net interest Margin (NIM) - 5.14% Mar 2012.Capital Adequacy Ratio - 19.45% Mar 2012.Net Non-Performing Assets (NPA) - 0.30% Mar 2012
While admittedly this record is on a very small base, but what is noteworthy for me is that the company has continued to keep growing its disbursements (at a great pace) in an environment where SME businesses were probably the worst hit. The growth pace in FY 2014 seemingly remains intact. Currently valued at 1.14x BV
Unlike vehicle financing or other financing, machinery financing I would assume needs a certain level of expertise and being clued in to their main industry domains (and their prospects), linkages with manufacturers, and the like. It's not something that someone with adequate financing can just decide and get into action straightaway!
Interested to examine, more? Let's focus if there's something special about Intec Capital and if it looks to be sustainable??