The stock market is at its peak and the IPO market is also looming now because of the entry of another company in the share market. The issue of Bangalore-based micro finance company CreditAccess Grameen is being open its IPO from tomorrow. Its price band is 418 to 422. With a lot size of 35 shares, the company wants to raise Rs 1131 crore through this public issue.
CreditAccess Grameen IPO is going to present its IPO from 8 to 10 August. The company will issue new shares of Rs 630 crore, while the shares of Rs 501 crore will be sold under offer-for-sale. The company lends itself to rural areas.
CreditAccess is in the business of distributing small loans to rural poor women and they are in the business of micro loan finance. The company’s branches are present in 132 districts of 8 states. It has a total of 516 branches and 4544 loan officers.
Should We invest OR Avoid – CreditAccess Grameen IPO? Let’s check special discussion – Reviews by Indian brokers & brokerage firms
Expert suggestion & recommendations : CreditAccess IPO should be invested in rural IPO from a long perspective. Those who want to pay for the linking gains can also get 10-11 percent listing gains.
What is the valuation of CreditAccess Grameen?
After the IPO, the valuation of the company is estimated at 2.9 times. It is less than its rivals. The asset quality of the company is very strong and the return ratio is also better. In such a case, this IPO may prove to be good for long-term investors.
What is Business
The company works to provide lending to rural areas. Women are its main customers. The company lends itself under the Joint Liability Group (JLG) model. Under this, a group is identified according to the number of their family and the income of the family. This group is registered in a center. After this loan is given on the basis of single capacity. But the debt repayment is from the whole group.
By the end of March 2018, the company had 516 branches in 132 districts of eight states in the country. This includes Chhattisgarh, Goa, Karnataka, Kere, Madhya Pradesh, Maharashtra, Odisha and Tamil Nadu and Union Territory Puducherry. These states account for 62 percent of the country’s microfinance business.
CreditAccess does not hold its AUM of more than 6% in any one district. This means that the company’s portfolio is quite diverse. During the financial year from FY14, the number of subscribers has increased by three and a half times to 18.5 lakh.
What is the Financial Status?
During FY13, the company’s Asset Under Management (AUM) has gone up from Rs 57,00 per annum to Rs 4,975 crore. Its return on asset (ROA) has increased from 1.8% to 3.1%. Net interest margin has also increased from 9.9% to 12.7%.
After the blockbuster, the company’s gross NP had reached 2%. For the past six years, its net NPA has been zero due to the company’s best proven. During the FY14, the company’s net profit has risen from 66 % annually to Rs 124.6 crore.