Indostar Capital Finance Ltd. share price target

(valued at 1.7x FY20E ABV). IndoStar has embarked on a transformational journey and with the right mix of people, product portfolio, processes and the required infrastructure, we believe the business model is on the right growth path. We expect IndoStar Capital to report (a) strong earnings profile (38% / 22% CAGR in revenue / earnings over FY18-20E), (b) limited asset quality risks (given the history of near zero NPAs), and (c) superior returns profile (RoA at 2.7%, RoE at 10%+ by end-FY20E). Healthy capital position (CAR at 28%+) will supplment sturdy 45% CAGR in AuM over FY18-20E. Further, proficient senior management with an element of skin in the game through ESOPs and superior board...

Indostar Capital Finance Ltd. (ICFL) is a leading non-banking finance company (NBFC) registered with the Reserve Bank of India as a systemically important non-deposit taking company. It is a professionally managed and institutionally owned organization which is primarily engaged in providing bespoke Indian Rupee denominated structured term financing solutions to corporate and loans to small and medium enterprise (SME) borrowers in India. ICFL recently expanded its portfolio to offer vehicle finance and housing finance products. Although, company operated in a challenging credit environment in the initial years of our business operations business has experienced growth since the commencement of operations in 2011. Between fiscal 2013 and 2017, its total credit exposure, total revenue and net profits grew at a CAGR of 30.0%, 31.4% and 23.7% respectively. Its corporate lending business which was at 99.8% in FY 2015 declined to 76.8%...

lending, vehicle financing and housing financing. As of February 28, 2018, the company had 71 retail branches across India. As of December 31, 2017, lenders of the company included 14 public sector banks, 13 private sector banks, 21 mutual funds and 4 insurance...

IPO NOTE

Indostar Capital Finance (Indostar) commenced operations in 2011. It is primarily engaged in providing structured financing solutions to corporate a well as SME borrowers in India. In 2017, it started providing housing finance through its wholly owned subsidiary - IndoStar Home Finance Pvt Ltd (IHFPL) and also began vehicle financing. The promoter of the company is Indostar Capital (pre-issue ownership - 91.55%), which is promoted by Indostar Everstone and Everstar Holdings Pte Ltd. As on December 31, 2018, Indostar's gross loan portfolio was at | 5171.7...

Outlook & Valuation: At the upper end of the price band, ICFL is valued at 2.2x of Q3FY18 book value (Pre-IPO) and on post dilution basis at 1.9x of Book value. The strong sponsorship of Everstone and other shareholders, along with a wellcapitalised balance sheet and an experience and focused management provide an excellent base for t..

Indostar Capital Finance Limited (ICFL), established in 2009, is a Recommendation leading NBFC lending to mid-to-large sized corporates in manufacturing, services and infrastructure industries and real estate Price Band (per share) Rs570-572 developers of residential and commercial building projects....