Au Financiers (India) Limited is a Rajasthan based NBFC (non banking finance company). It was incorporated in Jaipur, Rajasthan in 1996. Au Financiers IPO review will go through information available and find how good it is for investment.
It started journey as a NBFC for giving financial services to people of low and middle income group and small business owners who do not have facility to avail service of formal banking services. It mostly worked at retail segment of financial services.
Au financiers operate in three main channels of retail financial services.
- Personal and commercial vehicle financing
- Providing loans to MSMEs (micro, small and medium enterprises)
- Providing financial services like loans to SMEs (small and medium enterprises)
The retail financing business helped the company to grow at a rapid pace. Till date its journey has seen the following important events.
- In 2000 the company received the NBFC license from RBI.
- In 2005 it became the commercial associate of the HDFC bank for creating and servicing business in the vehicle loans space.
- In 2007 it started providing loans to MSMEs
- In 2011 it started business in housing finance space
- In 2012 it started providing loans to SMEs
- In 2016 it received license to work as Small Finance Bank (SFB)
- IPO in 2017
Company financials –
The consolidated financial result of last five years show that it has made steady northward progress and increased the profit margin at a steady rate. The rate of increase in profit margin year to year shows the thriving business it is running. Though a big jump in 2017 fiscal profit margin is due to sale of its housing finance subsidiary from which it received net Rs 670.3 crores which is reflected in profit margin.
Till 2016 December it operated across the country through a network of 300 offices and 6092 employees serving a total of 270,692 active accounts.
About the Au financiers IPO:
- Issue opens on – 28 June, 2017
- Issue closes on – 30 June, 2017
- Issue type – Book built issue
- Face value – Rs 10
- Issue Price – Rs 355 to Rs 358 per equity share
- Lot size – 41 and multiples thereof
- Issue size – 533,422,169 nos. of equity shares
- Listing exchange – NSE, BSE
The above data is tentative, as per DRHP submitted to SEBI.
Conclusion from Au Financiers IPO review:
Au Financiers grey market price (GMP) is Rs 115 – Rs 117 as of 17.06.17 5pm. At Rs 358 the P/E is 38 as per fiscal 16 EPS Rs 9.34. Its recently listed peers RBL’s P/E is 41 where as Ujjivan has P/E of 18. Au Financiers IPO review finds that IPO price is not high as per fiscal 16 standalone EPS. But 3 years consolidated EPS of Rs 6.94 puts the IPO P/E at 51 which is on higher side. Looking at NPA at 2% historically and AUM Rs 10, 734 crores and the way the sector is growing, the Au Financiers IPO review finds the IPO has good prospect. The way its peers attracted customers during recent listing, we can expect the same for this IPO.
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Disclaimer: Views expressed in this review is an educated guess made on the basis of available data from open source expressed for the purpose of knowledge sharing. By no means it should be taken as an investment advice or recommendation. Investor/ trader should invest money at their own risk.
Partha, an engineer by education, is theoratically actively following the stock and commodity markets since 1990. He is an active trader since 2003. He has received formal education in future and options and quantum analysis. He is presently working on research oriented projects using Python and data analytics.