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    This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind

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    Moneytimes 10 -1 Aug

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    This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind

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    19 views1 page

    Moneytimes 10 - 1 Aug

    Uploaded by

    Manohar B
    This document provides an overview of IndoStar Capital Finance Ltd, a non-banking finance company owned by private equity firm Everstone Capital. It discusses IndoStar's diversification into retail lending businesses like commercial vehicle financing and affordable housing, which now make up 40% of its over Rs. 7765 crore loan book. The document also notes that IndoStar maintained its monthly disbursement targets despite liquidity issues, and its asset quality remains resilient with gross NPAs of 2.9%. In the first quarter of 2020, IndoStar saw a 50% rise in profit and 86% higher revenue, with total loans up 36% and retail loans growing 2.5 times. The author recommends accumulating Ind

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    of 1

    Premium: IndoStar Capital Finance Ltd: Everstone’s NBFC!

    Dated 10 August 19 and Vol.XXVIII No.41

    (BSE Code: 541336) (CMP: Rs.287) (FV: Rs.10)

    IndoStar Capital Finance Ltd (IndoStar) is a non-banking finance company


    (NBFC) registered with the RBI as a sys temically important non-deposit
    taking company, professionally managed and owned by private equity giant
    Everstone Capital. IndoStar started its corporate lending business in 2011
    followed by retail lending business in 2015. Subsequently, it set up
    commercial vehicle (CV) finance and affordable housing finance businesses
    to de-risk its loan book. The results of this diversification strategy are evident
    in its over Rs.7765 crore loan book. Non–corporate loans constituted 40% of
    its loan book as at 30 June 2019 v/s 22% a year ago.

    IndoStar raised ~Rs.700 crore in May 2018. Despite the tight liquidity
    conditions witnessed after the IL&FS crisis, it maintained its monthly
    disbursement target of Rs.550–600 crore. Its asset quality has been resilient
    so far. However, gross non-performing assets (GNPAs) rose marginally
    around 2.9% excluding the assets acquired by IIFL Finance. The acquisition
    of IIFL’s CV finance business last year increase d IndoStar’s distribution
    network and presence to 322 locations. It also enha nced IndoStar’s capacity
    to originate up to Rs.400 crore of loans every month. Moreover, IndoStar
    partnered with ICICI Bank for an innovative structure to ensure on -tap
    funding for its fast-growing CV financing business. The capital -efficient
    nature of this arrangement will boost IndoStar’s RoE in this business
    segment.

    In Q1FY20, IndoStar posted 50% higher PAT of Rs.47.09 crore on 86%


    higher revenue of Rs.419.06 crore. Total loan assets were 36% higher at
    Rs.10157 crore. Retail loan assets were 2.5 times h igher at Rs.5850 crore,
    taking the Retail AUM to 63%.

    IndoStar has the potential to become the next ‘Shriram Transport Finance’ of
    India. It is the first Indian NBFC to be sponsor ed by a leading private equity
    firm. Its risk:reward ratio seems favorable wi th the stock trading at 1.1x its
    FY20E book value. Accumulate the stock on dips for 2x returns in the next 3
    years.

    Author Subramanian Mahadevan

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