Mas Financial Services Ltd IPO....... Should you apply????
Hello
Friends,
This is the
second IPO of October and so far all the IPOs are having an awesome run at the
markets. This actually reminds me of the situations in 2004 to 2007 when IPOs
were riding on a power horse. However many IPOs that came out then lost huge
market value and today are trading in pennys. As I see today those situations
are surfacing. However let’s hope that the tides have changed and investors
make good money in the IPOs to come.
The IPO we
are talking about today is Mas Financial Services Ltd. Lets first look at the
basics.
Particulars
|
Details
|
Company Name
|
Mas Financial
Services Ltd
|
Issue Open Date
|
6th Oct
2017
|
Issue Closing Date
|
10th Oct
2017
|
Issue Price Band
|
Rs 456 to Rs 459
|
Issue Size
|
Rs 460.04 Crs
|
Shares per Lot
|
32 Shares
|
About the
company!!!
The company
is a Gujarat based NBFC which operated predominantly in 6 states including NCT
of Delhi. Our business and financing
products are primarily focused on middle and low income customer segments, and
include five principal categories:
(i)
micro-enterprise loans;
(ii)
SME loans
(iii)
two-wheeler loans
(iv)
Commercial Vehicle loans (which include new and
used commercial vehicle loans, used car loans and tractor loans)
(v)
housing loans.
Now that
you know the company. Should you invest in Mas Financial Services Ltd?
Promoters!!!
The company is a family run business promoted by
1. Kamlesh Chimanlal Gandhi
2. Mukesh Chimanlal Gandhi
3. Shweta Kamlesh Gandhi and
4. Prarthna Marketing Private Limited.
Come let’s
dive into this company to look at the fruits it might hold.
Utilization
of Funds!!!
The issue
is partly an OFS and partly a fresh issue.
1. OFS of Rs 227.04 Crs which will go
to the promoters and will not be received by the company.
2. Fresh issue of Rs 233.00 Crs which
will be utilized for one thing only and that’s to increase its capital adequacy
ratio. Being an NBFC capital adequacy is very important.
So into the
Financials now!!!!
1. The company has increased its
networth from Rs 104.83 Crs as on 31.03.2013 to Rs 383.60 Crs as on 30.06.2017.
2. Being a NBFC the company will naturally
have more debts. However its not more than twice the networth. Which is good.
3. Very less funds of the company are
into fixed assets and investments. It would be good if the company has more investments
however nothing to complain there.
4. The company’s total revenue was at
Rs 341.52 Crs in the year 2016-17 and Rs 97.82 Crs in Q1 of 2017-18.
5. Now looking into the profit of the
company, its increased from Rs 26.84 Crs in 2012-13 to Rs 67.42 Crs in 2016-17.
Even in the 3 months of Q1 2017-18 the company has made a profit of Rs 23.04
Crs which if we annualize will be around Rs 92.16 Crs. Which is quite good.
Valuations!!!
The company
has been very consistent in improving its business and in increasing its
profits year on year. The company’s EPS for 2017-18 is Basic Rs 15.86 and
Diluted Rs 15.08, which takes the PE at Rs 459 to 29 times on basic. If we
consider the annualized EPS of FY 2017-18 the PE would come to 22.76 which is
not bad. Further there are many finance companies already listed and most of
them are having a PE beyond 29. Therefore we can say that this company is
priced well.
So the
verdict on this case!!!
Mas
Financial Services Ltd looks very promising and is a “Subscribe”.
Thank you
very much for joining us.
-RicherInvestor
Written by
Roger Vins Herman (CA, Mcom)
Disclosures:
The author or any person at RicherInvestor doesn't have any financial interest in the Company.
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