Is there any details available on asset quality of wholesale book acquired from subsidiary Sammaan Finserve Limited?
What could be rational behind it?
1 Like
Erstwhile ICCL is renamed as Sammaan Finserv. Whatever NPA that you see in previous investor presentation that still remains the same. Basically they are indirectly merging their subsidiary business with themselves
1 Like
This risk is playing out as mentioned earlier.
Please note, there is further legacy book up for cleaning
4 Likes
Any idea, how much book is cleaned and how much still to be cleaned ? The loss for this quarter is massive
2 Likes
They have also deleted investor presentation of last tow quarters. Any reason why such mischievous actions by Management ?
4 Likes
these are available on company & NSE website
Q1’25 Earning ppt.pdf (2.4 MB)
Q4’24 Earning ppt.pdf (1.7 MB)
3 Likes
97f3af78-fecf-488f-9220-55644daccf8c.pdf (2.0 MB) - Investor Presentation for Q2FY25
https://youtu.be/9uObzpfkRCA?si=X92hqy6lFnMmtddH - Concall for Q2FY25
3 Likes
Prediction according to management guidance if they achieve 70% of guidance:
1. Adjusted Net Worth (2027):
Starting Reserves (2024) = ₹19,679 Cr – ₹1,800 Cr (Net Loss) = ₹17,879 Cr.
Net Worth (2024) = ₹17,879 Cr + Equity Capital (₹113 Cr) = ₹17,992 Cr.
Add retained profits for 2025–2027 (70% of Adjusted NP):
Cumulative Retained Profit (2025–2027) = ₹4,410 Cr × 0.7 = ₹3,087 Cr.
Adjusted Net Worth (2027) = ₹17,992 Cr + ₹3,087 Cr = ₹21,079 Cr.
2. Book Value Per Share (BVPS):
BVPS (2027) = Net Worth (2027) ÷ Shares Outstanding
BVPS (2027) = ₹21,079 Cr ÷ 73.84 Cr ≈ ₹285.50.
3. Probable Share Price (2027):
Share Price (2027) = 1.5 × BVPS
Share Price (2027) = 1.5 × ₹285.50 = ₹428.25.
Correct me if I have mistaken…
Note: This is bullish view projections
8 Likes
Hi All, I came across this video and found it a good overview of whats going on. I am invested and biased.
3 Likes
This podcast was generated using Google’s NotebookLM product. You can upload various formats, including YouTube videos and annual reports, to create insightful content.
The podcast provides an excellent overview and is highly recommended!
Listened this two weeks back. I am personally bullish on this.
Note: Invested and biased. My posts are not for any recommendation.
5 Likes
Wow, really AI ?!?! It sounds very natural. Discussion flow is very good.
1 Like
This will be helpful.
2 Likes
Not sure why they keep on raising fresh equity capital. Currently they are already in overcapitalised state. This 2500 crores does not make sense
2 Likes
Hope this time very few investors (great if FII or DII) allocated major chunk of this issue so it can have good roster on investor side and also help them on reduce cost of borrowing. NCD are a way high in terms of COB. thanks!
2 Likes
I think they must have aggressive growth plan with keeping balance sheet strong… If such a big QIP happens at higher price than current one, it will be beneficial for current shareholders.
1 Like
They are raising more and more equity. For a lending business if you use your own capital, you will never make good RoE.
One possible reason they may be choosing equity route is because lenders are still not sure if legacy issues in the loan book are resolved and are therefore wary of lending to them. In such a scenario company has to raise equity as last resort.
2 Likes
One of the reasons I see is they might do further write offs on legacy book. They will do the write off equal to the fund raise and quote, “our networth has not changed.”
This could be one of the reason for their future net worth number guidance is not very high and is in current range.
Disc: Invested
3 Likes
One way this might be good news is if they are inducting a strategic investor into the newly created Sammaan Finserv (SFL) - for which they took the Rs 4000 cr provision in transferring their legacy loan book. SFL is focused on Affordable Housing. As per their Q2 Presentation - ‘Realization of quick, value unlocking option with induction of a strategic investor partner in SFL’. That would imply a nearly 40-50% stake in SFL to a strategic investor - which seems quite large?
Disc: Invested - with little faith in the management and most likely going to exit at an opportune moment
3 Likes
3868196d-5b48-4a46-9e2e-6d775825fa58.pdf (1.2 MB)
All answers provided by Mr Banga in latest EGM notice shared with shareholders and exchanges.
Page 15 onwards give a clear rationale for this QIP and re iterates the forward path for the company. I remain optimistic and see a doubler from current levels in 2 years time frame.
Disclosure: Views are biased as I am significantly invested from lower levels and optimistic by nature
6 Likes
Rough calculation according to management guidance:
-
Pricing of QIP Shares:
- If the minimum price for the QIP is set at ₹150, matching the rights issue price from February 2024.
- The pricing will also comply with SEBI ICDR regulations, allowing a maximum discount of 5% on the floor price determined by the regulations.
-
Dilution Impact:
- The proposed QIP will lead to a maximum dilution of 19% of the existing share capital.
- The current paid-up capital is ₹148.54 crore, divided into 74.17 crore fully paid-up shares and some partly paid shares.
-
Purpose of Fundraising:
- The company aims to augment its capital base, seek a credit rating upgrade, reduce borrowing costs, and support growth in disbursals, especially in retail loans and MSME segments.
- The additional equity is expected to enhance the net worth to ₹23,000 crore and support balance sheet growth of approximately ₹28,000 crore.
-
Long-term Growth Vision:
- Targeting an AUM of ₹1,00,000 crore by FY27, with monthly disbursals reaching ₹1,500 crore.
- The subsidiary, Sammaan Finserve, will focus on smaller ticket loans and MSME LAPs, leveraging the parent company’s enhanced credit profile.
Revised Price Calculation with Clarifications
Key Variables:
- Post-QIP Equity:
Net worth post-QIP will be ₹23,000 crore (current ₹19,979 crore + ₹2,500 crore raised). - Shares Outstanding (Post-Dilution):
If the dilution is 19%, total shares will increase by approximately 14 crore shares, bringing the total to 88 crore shares (approx.).
Book Value Per Share (BVPS):
[ \text{BVPS} = \frac{\text{Net Worth}}{\text{Shares Outstanding}} ]
[ \text{BVPS} = \frac{23,000}{88} = ₹261.36 ]
Potential Share Price:
-
P/BV Method:
If the stock trades at an industry P/BV ratio of 2.0x to 2.5x:
[
\text{Price} = \text{BVPS} \times \text{P/BV} = ₹261.36 \times 2.0 \text{ to } 2.5 = ₹522.72 \text{ to } ₹653.40
] -
EPS-Based Valuation:
Assuming ROE of 12% and the projected equity of ₹23,000 crore:
[
\text{Profit} = \text{Net Worth} \times \text{ROE} = ₹23,000 \times 12% = ₹2,760 , \text{crore.}
]
[
\text{EPS} = \frac{\text{Profit}}{\text{Shares Outstanding}} = \frac{2,760}{88} = ₹31.36
]
At a P/E ratio of 15–20x:
[
\text{Price} = \text{EPS} \times \text{P/E} = ₹31.36 \times 15 \text{ to } 20 = ₹470.40 \text{ to } ₹627.20
]
Conclusion
The estimated share price post-QIP could range between ₹470–₹653, depending on the valuation method and market conditions. The capital infusion, while dilutive, is strategic for reducing borrowing costs and enabling sustainable growth.
6 Likes