Au Small Finance Bank Ltd. share price target

However, given valuations, we maintain our NEUTRAL stance with a TP of Rs 550 (5.2x FY20E ABV). AUs 2QFY18 performance exceeded our estimates. The loan book grew by 12.8% QoQ (29.5% YoY) on the back of higher growth in the Wholesale book. Traction in CASA was also good, with QoQ growth of 31%. Operating cost increased 48.1% QoQ, owing to full quarter performance.

Initiate coverage with NEUTRAL and a TP of Rs 530 (5.2x FY20E ABV, 31x FY20E EPS). Faster growth and fund raising at high valuations are typically book value accretive and rewarding for shareholders, as seen in lenders like Bajaj Finance, IndusInd Bank, Kotak, etc. However, with AU adequately capitalised for the next two to three years (Tier 1 ~18.9%), this upside may not materialise immediately. AU Small Finance Bank (AU) was an NBFC till Mar-17. Its loan portfolio of Rs 108bn (Jun-17) is well-diversified across Vehicle Finance (VF), MSME and SME loans. AUs lending is focussed on underserved segments in urban, semi-urban and rural India, and offers investors multi-year growth opportunities. While headline valuations appear stiff (5.6x FY20E ABV), underlying business opportunities and management strengths are strong.

IPO Note - Au Small Finance Bank Issue Open: June 28 - June 30 2017, Price Band: Rs. 355 - 358. Offer Size: Rs.1912.5 crs

Background: AU Small Finance Bank had commenced operations in 1996 in Jaipur, Rajasthan and was registered as an NBFC with the RBI in 2000. In 2005, it became a commercial associate of HDFC Bank for originating and servicing vehicle loans which assisted the company in the implementation of various processes and systems. AUSFB has recently transitioned from a prominent, retail focused non-banking finance company (NBFC), which primarily served low and middle income individuals and businesses that have limited or no access to formal banking and finance...

AU Small Finance Bank Ltd. (AUSFB) commenced operations in the year 1996 in Jaipur, Rajasthan and was registered as an NBFC with the RBI in the year 2000. AUSFB primarily served low and middle-income individuals and businesses that had limited or no access to formal banking channels. AUSFB received license from the RBI on 20thDecember, 2016 to set up an SFB and was the only NBFC categorized as an asset finance company to obtain such a license....

Incorporated in 1996, AU Small Finance Bank Limited (AUSFB) has transformed over the years from being a channel partner of HDFC Bank, then an auto NBFC, a diversified retail NBFC and now a small finance bank. Having significant presence in Rajasthan, it has established itself as a preferred lender to the underserved segment in areas of vehicle, SME and MSME finance. It is highly focused on low and middle income individuals and businesses in rural, semi-urban and outskirts of urban markets that have limited or no access to formal banking and finance channels. The company is...

AU Small Finance Bank (AU SFB) commenced operations in 1996 in Jaipur, Rajasthan. In 2016, it was the first asset finance NBFC, which got a 28-Jun-17 small finance bank (SFB) license. It commenced its SFB operations with 30-Jun-17 effect from April 19, 2017. Promoter Sanjay Agarwal is the managing...

AU Small Finance Bank (AUSFB) was one of the ten NBFCs which had obtained approvals from RBI for setting up a small finance bank (SFB). As a NBFC, it has a history of successfully serving the low & middle income individuals and businesses having limited or no access to the formal banking and finance systems Outlook & Valuation: At..

accounts, current accounts, recurring deposits and other sources as Total prescribed by the RBI. Going forward, such access of low cost funding Retail Application Money at Higher Cut-Off Price per Lot would lower the cost of borrowings for the company....

The offer for sale: Company will not receive any proceeds from the offer for sale by the selling shareholders and the proceeds received from the offer for sale by the selling shareholders and the proceeds...