Hi, I am a new comer here and wannabe investor. I would like to share my thoughts on this well known company .
it is promoted by singh brothers of the fortis group and they own around 50 percent of the company.
its market cap is 4984 crores and share price is around 280.
it recently posted its no for the march qtr and fy 2016 where its revenue stood at 1100 crorish and loss was around 330 crores due to provision of 466 crores for dimutnition in the valus of its subsidary for the march quarter and for the year fy 16 its revenue stood at 4085 crores and the loss stood at 47 crores because of the above said provision
revenue split by verticals is
CAPITAL MARKETS AND WEALTH MANAGEMENT 11%
HEALTH INSURANCE 7% AND
BUSINESS DIVESTED OR BEING DIVESTED IS 23%
the above info is as per the latest presentation by the company on the stock exchanges.
lets talk about why i find this company interesting…
first the company exited from aegon religare life insurance company in 2015.
then the company has divested its domestic asset management business for around 530 crores… Religare invesco was the name of the fund and it used to held 51 percent and the rest was held by invesco… invesco bought out the complete stake for 530crs, which is around 5 percent of the asset size
then it divested religare health trust trustee manager for around 15 million USD to fortis health care.
then the company has decided to divest its stakes in the Landmark partners in which it holds 54 percent and 82 percent in northgate capital according to the latest annual report. both these funds manage AUMs of 20 Bn USD. (Thats One Lakh twenty thousand crore rs)… here comes the actual deal…Land Mark partners (16Bn ) and Northgate (4Bn)
Let us assume it manages to get the same deal ( 5% of the AUM) as its local AMC deal. then the amount it can fetch is around 3500 crores for the both business assuming the incomplete shareholding…(BULLISH CASE SCENARIO)
Let us assume it manages to get 2.5 percent of the AUM then it manages to get around 1800cr (Fair deal)
Let us totally be bearish and assume it manages to get only one percent then we get 700 crores…
finally religare has decided to slit the business into three verticals focusing on
Capital markets and securities
its lending portfolio is around 16000 cr and they would like to be at 30000 cr by 2018.
Health Insurance they managed to get a revenue of 500 cr now and they wish to break even by 2018
They have market share of around 2 percent in securities and they have a decent capital market revenue…
so sum of the parts this definetly looks like a sure shot multibagger on three different listing after divesting all the foreign subsidaries…
the news regarding three different listing is below
the company still holds yournest and cerestra edu infra fund where it has a significant share holding … both these companies do angel investing and they plan to divest when they get good valuation.
Positive aspects aside, lets talk about the negative aspects:
they do not plan on giving any dividends from the stake sales… they plan to strengthen the balance sheet
Corporate governance :one cannot trust these promoters as they have the history of expanding overseas and then selling them later, albeit for profits
Disclosure; I hold small quantity around the cmp and I plan to buy more if it falls 5-10 percent from here.