MOSL: INDOSTAR CAPITAL FINANCE (Buy)-Steady quarter-Acquisition of IIFL’s CV financing business complete
INDOSTAR Capital Finance: Steady quarter; Acquisition of IIFL’s CV financing business complete
(INDOSTAR IN, Mkt Cap USD0.5b, CMP INR356, TP INR525, 48% Upside, Buy)
- 4QFY19 PAT increased 83% YoY to INR741m, driven by healthy NII growth, higher upfronting of assignment income and controlled opex.
- The company completed the INR35.2b (INR22.4b on-book) acquisition of IIFL's CV financing business on 31st Mar'19, resulting in goodwill of ~INR3b. Excluding the acquisition, total AUM grew 8% QoQ to INR83.7b, largely driven by the VF portfolio.
- Disbursements in corporate finance rebounded from INR3-4b in the past two quarters to INR12b in 4QFY19, due to a structured finance deal of ~INR6b for a stressed asset. INDOSTAR sold down INR3-4b and retained INR2.5b on its books. In the vehicle finance business too, disbursements improved from INR3.5b to INR5.8b QoQ.
- NII declined 10% QoQ to INR1.27b, driven by a sharp 11% QoQ increase in interest expenses as incremental cost of funds rose to 10-10.5%.
- GNPL ratio jumped 170bp sequentially to 2.6% due to the IIFL book acquisition (GNPL ratio of ~9%). However, management expects net credit loss of 100-150bp on a run-rate basis for the combined VF book.
IndoStar Capital Finance Ltd. IndoStar Capital Finance Limited is an India-based non-deposit accepting non-banking financial company (NBFC). The Company is engaged in providing financing solutions to corporates and loans to small and medium enterprise (SME) borrowers. It offers vehicle finance and housing finance products. It operates four lines of business, namely corporate lending, SME lending, vehicle financing and housing financing. Its corporate lending business consists of lending to mid-to-large sized corporates in manufacturing, services and infrastructure industries, and lending to real estate developers. Its SME lending business involves providing secured loans to small and medium size enterprises, including businessmen and manufacturers. Its vehicle finance business involves providing financing for purchases of used or new commercial vehicles, passenger vehicles and two-wheelers. Its housing finance business comprises two business lines, namely housing finance and retail housing finance.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.