gross disbursement q4fy2024= 4437 cr >>gross disbursement q3fy2024=4139 cr,
reduction in AUM reflects that the new loans issued were of shorter duration ,
q3fy 24
q4fy24
in q4fy24 result presentation 19 months journey average churn days of loan book have come down to 12 days from 40 days in q3fy24 result presentation 16 months journey
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Ashish kacholia has reduced stake in the company, although his style of investing has been of if not completely momentum, then at least it is factored in in his investing, will have to check the results for the next quarter, then only i will take a call.
It is incorrect. Ashish kacholia got diluted but number of shares remain same as per June 2024 filings.
Disc: Invested.
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q1fy2025 presentation shows that the company has zero bank debt, can someone help me understand why a NBFC would repay their entire bank debt of 800cr and borrow unsecured loan funds of 600 cr from promoters
also the business has performed poor in all matrix QoQ basis
The company has withdrawn its Crisil rating it seems today. Has repaid all the bank loans.
Any idea why the NBFC would give up it’s AA rating?
Company have received NBFC Type 2 certificate from RBI.
Can anybody highlight the implications of this like on the cost of funds and other details?
They have to follow more stringent regulatory controls than earlier as now the can use public money and deal with them directly.
RBI can impose paneity or restriction on their activity if they don’t follow norms!
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Penalty by RBI !!
They had their first concall, here are my running notes from the same.
Opening remark:
- 1st investor call
- Key team- saurabh dhavan ceo, sahil sikka coo and cfo, abhishek mahajan cro, ankush agar chief experience officer
- Having worked with apl apollo and apollo pipes, lack of funding sme traders which restricts their growth
- One stock supply chain funding company
- 720 crs pure equity raise, 50% promoters and 50% other investors
- Initial target to address group channel partners, once this gets introduced here then other anchors and brands will be introduces
- Other than apollo, working with jsw, vedanta, tata group, oppo mobile, kajaria, havells etc
- Apl apollo tubes in covid started to stop credit, and instead of 1% cash discount to 2% cash discount, traders churned inventory 7-8 times, so this would give them 15-16% more v/s 9-10% of interest cost, so thats how apl apollo reduced debtor days
- Then a couple years later larger distributors stopped taking the discount as they werent able to raise cash using banks, so the group decided to tap into this
- Now 2000 cr loan book, 25-30 days repayment cycle
- 6000 cr loan book target till Fy27, ROA 4%, ROE 18-20%, NIM 6-6.5%
- 25-30% is groups own channels, and retailers associated with their own distributors, distributors 50-60k cr, retailers each do 5k cr or so, theyve also done large businesses, 12-13% interest rate for distributors but now as company is expanding to retailers this will also increase
- Infused other 450 crs in form of warrants last month
- 856 cr net worth, 720 infused initially, 1500 cr net worth by fy27, loan book at 2.2x times
- 35-40% exposure with be group and rest will be other groups
- Terms are fixed with large corporates, invoices flow from SAP of anchor to them, and direct financing happens to the large corporates only and not the distributor
- Large banks 9-11% and lower risk profiles, large nbfc aditya birla, tata capital 11-12% still lower risk profiles, new age corporates 13% , company will do at 11-13%
- Systems are aligned with income tax and gst portal
- Automated payments also done with hdfc axis
- Credit assessment model is a development ongoing for the software
- Plans to launch 24*7 banking from next year onwards
- 2500 cr loan book by end of year
- Current 1100 loan book??
- Started immediately post listing, wanted to maintain cg standards
- No CGs given by apl apollo and pipes for sg finserve
Participant discussion
- Asset quality how would it maintain, there are internal checks done, plus history, plus
- 35-40 target list of large anchor, eg tata motors itself runs 6000 cr financing
- 75 anchors by FY27
- Top down approach borrower, dealer of an anchor, MOU will be signed with an anchor with condition that based on their recommendation theyre lending to the dealer, and incase of default the anchor company will not supply to the dealer, and 5 years plus relationship of dealer and anchor and at least 50% of business from the anchor
- 30000 cr total worth of disbursements
- Minimum will be 3 years relationship, personal guarantees of promoter if incase proprietor then they take of wife and kids also, plus there are assets taken also as collateral
- On 1500 crs 13% direct, on 4500 5% spreads, ROA will be 4% and ROE 18%
- After finance cost employee and tech cost only
- Process of getting type-b/2 license from RBI hence the loan book was reduced, now that license acquired will run up again, provision is against standard asset only
- Business team responsible for collections, this is all timely, negligible overdue
- Underwriting 11 people collections 4 people total employee 64
- Future debt/equity will be 3:1, currently entire funding equity
- Previous credit rating was AA, withdrawn during license period, now will come back
- Quarterly disbursal run rate- 4000 crs per qtr, 5000 crs per qtr when 1500 crs
Disclosure- tracking not invested
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Link to Concall
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The balance sheet of Sept 2024 shows almost no borrowing and an approx drop in the loan assets of the company. What happened?
PS : Just started tracking the company and still have to go through a lot of docs
It was done to ensure type 2 NBFC license .