Today we will look at MAS Financial Services Ltd IPO Review and ascertain if it is worth investing.

About the Company:

Incorporated in 1995, MAS Financial Services is a Gujarat based NBFC (Non-Banking Financial Company). Company operated across six States and in Delhi through 119 branches. As of September 30, 2016 Company had more than 530,000 active loan accounts and 3,200 Customer.

MAS Financial offer product and services under 5 categories:
1. Micro-enterprise loans
2. SME loans
3. Two-wheeler loans
4. Commercial Vehicle loans
5. Housing loans

Company also have commission based direct sales agents and revenue sharing arrangements with various dealers and distributors where part of loan default is guaranteed by such sourcing partners.

Issue Timetable:

Price of the Issue:

Objects of the IPO:

Note that the total capital raised will be 460 crores out of which 233 crores is fresh issue and 227 crores is Offer for Sale.

Some interesting information about the existing and the exiting investors:

• Existing investors will collectively sell shares worth Rs227 crore in the share sale. Germany’s development finance institution DEG-Deutsche Investitions-und Entwicklungsgesellschaft MBH (DEG) plans to fully exit MAS Financial. DEG will sell its entire 2.47 million shares for Rs112.66 crore. It had invested Rs65 crore in 2012.
• Another investor NederlandseFinancierings–MaatschappijvoorOntwikkelingslanden N.V. (FMO) also plans sell all of its 1.74 million shares, which at the upper end of the price band will fetch it Rs79.34 crore. FMO invested Rs43 crore in MAS Financial in 2008.
• Impact investor Lok Capital, which currently holds 1.28 million shares in MAS Financial, will take a part exit. Lok Capital will sell around 768,433 shares, which will fetch the impact investor Rs35 crore. Lok Capital invested Rs41.33 crore in 2014.
• In March, Motilal Oswal Private Equity bought around 8% in MAS Financial for Rs135 crore. The private equity investor is not selling any stake in the IPO.

Risk Factors:

• The business operations involve transactions with relatively high risk borrowers. Any default from them could adversely affect the business, results of operations and financial condition.
• Company extends loans to other financial institutions such as MFIs, NBFCs and HFCs. If there is a default by these financial institutions or if they are unable to maintain their relationships with these institutions, the business, financial condition and results of operations may be adversely affected.
• Their inability to compete effectively in an increasingly competitive industry may adversely affect the net interest margins, income and market share.

Company Strengths:

• Track record of consistent growth with quality loan portfolio.
• Diversified product offerings presenting significant growth opportunities.
• Access to diversified sources of capital and cost-effective funding.
• Deep market knowledge through extensive sourcing channels.

Observations from Profit and Loss Statement:

The Profit after tax number has increased consistently for MAS Financial Services. IF we annualize the Q1 FY2018 profit figures , we get 93.6 crores of profit for the whole year. Looking at 2013 to 2018 profit figures , the firm has almost quadrupled its profit in 5 years.

EPS and Price to Earnings:

The latest Earnings per share is 15.33₹ and thus the Price to Earnings ratio is 29.74 and 29.94 times at the lower and upper price band respectively.

Book value and Price to Book Value:

The latest book value is 66.25₹ rupees per share and thus Price to book value is 6.9 times.

Listed Peers:

The company is cheap compared to peers when taken into account the Price to Earnings and Return on Net worth but is expensive on Price to book value terms.

Opportunities:

• The Indian economy is one of the largest economies in the world, with a gross domestic product (“GDP”) on purchasing power parity basis of an estimated US$7.99 trillion in calendar year 2015. Per capita GDP in India has grown from an estimated US$5,500.00 in calendar year 2013 to an estimated US$6,200.00 in calendar year 2015.
• Given the sheer size of the Indian population and considering that a large section still lacks access to formal banking services, driving financial inclusion has always been a key priority for the government. The banking system and ‘priority sector’ lending have been the most explored channels to bring majority of the population under the ambit of formal credit institutions.[1]

Grey Market Premium:

Rs 180 per share on 07/10/2017

If you wish to know what GMP is, click here.

Conclusione: dovresti assolutamente iscriverti a questa IPO per ottenere buoni annunci e anche a lungo termine.

Divulgazione: questa risposta è solo una versione ridotta della versione completa che è stata pubblicata sul mio sito[2] Sono un analista di ricerca registrato NISM (NISM 201700120576) e ho un interesse finanziario in questa IPO.

Le note

[1] Revisione IPO di MAS Financial Services Ltd. Vale la pena investire questa IPO?

[2] Revisione IPO di MAS Financial Services Ltd. Vale la pena investire questa IPO?