- Date 06th Aug; IPO Opens 5-7th Aug at Rs. 853-856
- Valuations: P/E 17.6 times TTM, P/B 2.4 times (Post IPO)
- Mid Cap: Rs. 5,505 cr. Mkt cap
- Industry – NBFC MFI
- Advice: SUBSCRIBE
- Overview: Spandana is a rural focused NBFC-MFI with a geographically diversified presence in India. It offers income generation loans under the joint liability group model, predominantly to women from low-income households in rural areas. They are the 4th largest NBFC-MFI and the 6th largest amongst NBFC-MFIs and SFBs in India, in terms of AUM. Revenues, NII and profit for FY19 were ₹1,049 cr., ₹640 cr. and ₹312 cr. resp. Capital adequacy is 39.6% which is very safe. Spandana exited from CDR in March 2017 and the operations are stable now. At a P/B of 2.4 times & PE of 17.6 times (post IPO), the valuation look attractive.
- Risks: 1) Economically and politically sensitive sector 2) Significant exposure to unsecured loans.
- Opinion: Investors can SUBSCRIBE to this IPO with a 2 year perspective.
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