IPO NOTE: IndoStar Capital Finance Limited - Subscribe
Issue Opens: 09-May-18, Issue Closes: 11-May-18, Price Band: Rs570-572
IndoStar Capital Finance Ltd. (ICFL) aspires to become a diversified, granular NBFC given its focus on nurturing scalable retail lines of business. Incepted as a wholesale financier in 2011, ICFL today offers well-structured real estate (RE) financing, SME loans, vehicle loans and retail mortgages. The share of retail lending, currently 23%, is expected to rise substantially over the next three years.
While SME lending is on a high growth trajectory, the operational platform for vehicle finance and housing loans is geared towards making a sizable future contribution in loans assets. To ensure success in retail lending, ICFL has onboarded Mr. R Sridhar as the Vice Chairman & CEO, a veteran of 30 years’ experience that includes a pivotal stint as the MD of Shriram Transport. The rebalancing of asset mix is unlikely to hamper loan asset growth which has averaged 30% pa over FY13-17.
Proceeds from the fresh equity issuance would augment growth capacity and help absorb unforeseen risks. Regional concentration in RE financing and slow ramp-up of vehicle and housing finance constitute the key risks.