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Indostar Capital Finance
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IndoStar Capital Finance Ltd. (IndoStar) is a professionally managed and institutionally owned organization, which offers structured term financing solutions to corporates, and loans to small and medium enterprise (SME) borrowers in India. It has recently expanded its portfolio to offer vehicle finance and housing finance products through its network of 129 branches. The housing finance business is operated through IndoStar's wholly-owned subsidiary IndoStar Home Finance Private Limited.
IndoStar Capital Finance Limited is a leading non-banking finance company ('NBFC') registered with the Reserve Bank of India as a systemically important non-deposit taking company. The Company operates four principal lines of business, namely corporate lending, SME lending, vehicle financing and housing financing.
IndoStar Capital Finance Limited was incorporated as a private limited company with the name 'R V Vyapaar Private Limited' on July 21, 2009. The Company was registered as a non-public deposit taking NBFC pursuant to a certificate of registration (bearing number N-05.06857) dated June 17, 2010, issued by the RBI. For business and commercial reasons, the name of the Company was subsequently changed to 'IndoStar Capital Finance Private Limited' on November 15, 2010. In 2011, the company received investment from Indostar Capital.
In 2012, the company entered into its first loan facility agreement. During the year under review, the company received long term external credit rating of CARE AA- from CARE for long term facilities of Rs 500 crore. It also received external credit rating of CARE A1+ from CARE for its proposed commercial papers with a limit of Rs 50 crore. During the year under review, the company issued commercial papers worth Rs 100 crore and NCDs worth Rs 200 crore. In 2013, IndoStar Asset Advisory Private Limited was incorporated.
The Company was converted into a public limited company and the name of the Company was changed to 'IndoStar Capital Finance Limited' on May 28, 2014. Pursuant to a change in name of the Company and conversion from a private company to a public company, a certificate of registration (bearing number N-05.06857) dated January 21, 2015 was issued by the RBI. The registered office of the Company was changed from West Bengal to Maharashtra on February 16, 2015. Subsequently, an order dated August 25, 2015 was issued by Regional Director (Eastern Region), Ministry of Corporate Affairs, Kolkata confirming the change in the registered office of the Company from the state of West Bengal to the state of Maharashtra and a certificate of registration of the order, dated September 8, 2015 was issued by the RoC.
In 2015, the company launched SME finance business with the disbursement of first SME loan. During the year under review, IndoStar Credit Fund (managed by IAAPL) was registered with SEBI.
In 2016, the company incorporated a wholly-owned subsidiary under the name IndoStar Home Finance Private Limited (IHFPL) for housing finance business. During the year under review, the company implemented an enterprise-wide loan management system OmniFin. During the year under review, IHFPL received license from NHB to carry on the business of a housing finance institution without accepting public deposits.
In 2017, the company disbursed its first housing loan. During the year under review, the company launched vehicle finance business and disbursed its first vehicle finance loan.
In 2018, the company opened its 100th branch and reached employee count of 1,000.
The company came out with an initial public offer (IPO) during the period from 9 May 2018 to 11 May2018. The IPO was a combination of fresh issue of Rs 700 crore and offer for sales of upto two crore equity shares (1.85 crore shares by promoter Indostar Capital and 0.15 crore share by other selling shareholders). The IPO was priced at Rs 572 per share. The issue was subscribed 6.8 times. The stock made its debut on the bourses on 21 May 2018.
The Board of Directors of IndoStar Capital Finance Limited at its Meeting held on 30 May 2018 considered and approved termination of Share Sale and Purchase Agreement dated 7 February 2018, executed between the company, Everstone Capital Advisors Private Limited (ECAPL) and IndoStar Asset Advisory Private Limited (IAAPL) for sale of 10,000 fully paid equity shares of Face Value of Rs 10 each (constituting 100% of the share capital) of IAAPL, held by the company to ECAPL.
IndoStar Capital Finance Limited on 19 June 2018 subscribed 3.5 crore equity shares of face value of Rs 10 each issued by IndoStar Home Finance Private Limited, a wholly-owned subsidiary of the company (IHFPL) on right issue basis at par, wherein Rs 17.50 crore was paid towards application money and balance amount shall be paid in one or more tranches, as and when calls are made by the Board of Directors of IHFPL.
On 24 August 2018, IndoStar Capital Finance Limited informed the stock exchanges that credit rating agency CARE Ratings Limited (CARE) has revised the outlook for rating of the Long Term Debt Programme including Market Linked Debentures of the company from 'Stable' to 'Positive'.
On 10 October 2018, IndoStar Capital Finance Limited said in a press release that the company has comfortable liquidity position, strong balance sheet and excellent asset quality. It has cash & equivalents on hand at Rs 1263 crore which is 22% of its external debt. The company has positive ALM, month on month, for next 18 months.
Indostar Capital Finance share price reflects investor sentiment toward the company and is impacted by various factors such as financial performance, market trends, and economic conditions. Share price is an indicator which shows the current value of the company's shares at which buyers or sellers can transact.
Market capitalization of Indostar Capital Finance indicates the total value of its outstanding shares. Marketcap is calculated by multiplying share price and outstanding shares of the company. It is a helpful metric for assessing the company's size and market Valuation. It also helps investors understand how Indostar Capital Finance is valued compared to its competitors.
Indostar Capital Finance PE ratio helps investors understand what is the market value of each stock compared to Indostar Capital Finance 's earnings. A PE ratio higher than the average industry PE could indicate an overvaluation of the stock, whereas a lower PE compared to the average industry PE could indicate an undervaluation.
The PEG ratio of Indostar Capital Finance evaluates its PE ratio in relation to its growth rate. A PEG ratio of 1 indicates a fair value, a PEG ratio of less than 1 indicates undervaluation, and a PEG ratio of more than 1 indicates overvaluation.
Return on Equity (ROE) measures how effectively Indostar Capital Finance generates profit from shareholders' equity. A higher ROE of more than 20% indicates better financial performance in terms of profitability.
Return on Capital Employed (ROCE) evaluates the profitability of Indostar Capital Finance in relation to its capital employed. In simple terms, ROCE provides insight to investors as to how well the company is utilizing the capital deployed. A high ROCE of more than 20% shows that the business is making profitable use of its capital.
Total debt of Indostar Capital Finance shows how much the company owes to either banks or individual creditors. In simple terms, this is the amount the company has to repay. Total debt can be a very useful metric to show the financial health of the company. Total debt more than equity is considered to be a bad sign.
The Debt-to-Equity (DE) ratio of Indostar Capital Finance compares its total debt to shareholders' equity. A higher Debt to Equity ratio could indicate higher financial risk, while a lower ratio suggests that the company is managing its debt efficiently.
CAGR shows the consistent growth rate of Indostar Capital Finance over a specific period, whether it is over a month, a year, or 10 years. It is a key metric to evaluate the company’s long-term growth potential. Main metrics for which CAGR is calculated are net sales, net profit, operating profit, and stock returns.
Technical analysis of Indostar Capital Finance helps investors get an insight into when they can enter or exit the stock. Key components of Indostar Capital Finance Technical Analysis include:
There are usually multiple support levels, but the main support levels for a stock are S1, S2, S3. Support levels indicate price points where stock might get support from buyers, helping the stock stop falling and rise.
There are usually multiple resistance levels, but the main resistance levels for a stock are R1, R2, R3. Resistance levels represent price points where Indostar Capital Finance shares often struggle to rise above due to selling pressure.
Dividends refer to the portion of the company’s profits distributed to its shareholders. Dividends are typically paid out in cash and reflect Indostar Capital Finance ’s financial health and profitability.
Bonus shares are usually given by companies to make the stock more affordable, increase liquidity, boost investor confidence, and more.
Stock split increases the number of its outstanding shares by dividing each existing share into multiple shares. When the company offers a stock split, the face value of the stock reduces in the same proportion as the split ratio.
The financials of Indostar Capital Finance provide a complete view to investors about its net sales, net profit, operating profits, expenses, and overall financial health. Investors can analyze financial data to assess the company’s stability and also understand how the company has been growing financially.
The profit and loss statement of Indostar Capital Finance highlights its net sales, net profit, total expenditure, and operating profits in the current financial year. This Profit and Loss statement is crucial for evaluating the profitability and financial stability of Indostar Capital Finance .
The balance sheet presents a snapshot of Indostar Capital Finance ’s assets, liabilities, and equity of shareholders, providing insights into the financials of the company.
Cashflow statements track the company's cash inflows and outflows over a period. It is an essential tool for understanding how well the company manages its liquidity and finances.
Indostar Capital Finance Net Interest Margin (NIM) tells about the profitability earned by all NBFCs and financial institutions. It represents the income generated by the bank from the difference between the interest earned on loans and the interest paid on public deposits. Net Interest Margin (NIM) is a metric that monitors the profitability generated from a bank's lending activities.
Non-Performing Assets (NPA) indicate the ratio of a bank's loans that are classified as non-performing. A lower NPA ratio reflects stronger asset quality and more effective risk management.
Capital Adequacy Ratio (CAR) is a metric to measure the bank's ability to absorb losses and still remain financially stable. A higher CAR shows that the bank is financially sound and can absorb potential losses.
Gross NPA is the percentage of total non-performing loans before provisioning, while net NPA is the percentage after provisioning. Lower gross and net NPA ratios indicate better loan quality.
Net NPA is the actual losses a bank has incurred due to NPA accounts. Lower the NPA, better the banks can maintain stable income from interest on loans.
CASA ratio tells how much of a bank's total deposits are in both current and savings accounts.
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