Lending

SBI Cards reported their Q4 FY23 earnings this past Friday - our update today highlights three interesting trends from the Q4'23 earnings across OpEx, Credit costs and Funding costs.

Paytm released their Q3 FY23 results, and the big news was that the company hit EBITDA (pre-ESOP cost) breakeven 3 quarters ahead of guidance! This week's analysis looks at the sustainability of these breakeven levels.

Five-Star Finance listed on the bourses late last month with a 70% subscription. The company is up 10%+ since listing, and is currently valued at ~17K crores - trading at a 4+x multiple on book. We cover 2 aspects of the business that could make or break where the company is headed.

A few days ago, the one-year lock in period on ~86% of outstanding Paytm shares expired - and this has caused the stock to drop to an all-time low. Paytm is down ~70% since its IPO and the company is now worth just Rs 30000 crores.

Muthoot and Manappuram are two of the largest gold loan NBFCs in India, with 2/3rds of the NBFC gold loan market covered between them. But things haven't been good in the past year - both company's shares have dropped between 30-40%.

Two Small Finance Banks (SFBs) - Fincare and Utkarsh - filed their DRHPs with SEBI in early August. Both are IPOing since they have to - they are mandated (per RBI guidelines) to go public within 3 years of crossing networth of Rs. 500 crores, and they've both hit this timeline.

In March 2022, RBI de-regulated interest rates for NBFC-MFIs. This change puts them on a level playing field with banks, and is great news for NBFC-MFIs.

Our update this week analyses two interesting trends panning out in the MFI space. Bandhan bank might have a role to play in this.

Retail lending has significantly increased over the last 10 years, and this has happened at the expense of corporate lending. Our update this week dives into why we think corporate lending might be well positioned to take off over the next few years.

Aadhar Housing Finance Limited (AHF) - a housing finance company (HFC) - filed an addendum to its DRHP with SEBI earlier this month. AHF is the largest HFC focused on low income housing.

Sachin Bansal-promoted Navi Technologies Limited (Navi) filed its DRHP with SEBI on 10th March 2022. Navi (short for Navigate) is building a one-stop-shop financial services company that aims to provide disruptive and seamless digital experiences to its customers

Fedbank Financial Services Limited (Fedfina) is a non-deposit taking, non-banking financial institution (NBFC). The Federal bank-promoted NBFC recently filed their DRHP with Sebi, and is looking to raise Rs. 900 Crores.

Digital lending fintech startups have seen a massive surge in India over the last several years.

Our analysis this week is a deeper look into Urban Cooperative Banks (UCBs) - their origin, how they've evolved, and where we think they're headed. Interestingly, an event earlier this year potentially sets a strong precedent for the future of UCBs. Read on to learn more.

Our update this week focuses on a 1900-page survey conducted by the government of India. This survey, called the All India Debt and Investment Survey (AIDIS) is a fairly detailed overview of the state of household finances in India, across assets and liabilities.