NBFC

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.

Indiabulls housing finance limited (IHF), a housing finance company (HFC), is issuing a secured NCD and the issue will run from October 7th - 28th, 2022. IHF also happens to be a listed company on the stock exchanges - and the share price hasn't done very well over the last few years.

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%.

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.

HDFC Bank and HDFC Limited, two of the largest financial entities in India, are merging into one. This merger - subject to regulatory approvals - will create a combined balance sheet of ~25 Trillion rupees – that is equivalent to ~12% of India’s GDP!

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.

Dhani and InCred - two fintech lending companies - are raising debt from the public. Both companies opened an NCD offering (non-convertible debenture, a borrowing instrument) this month - Dhani's offer closed earlier this week (27th Jan), and InCred's issue closes mid-February.

Five-Star Business Finance Limited is a unicorn & a rare one in their space. They aren't popular, despite being backed by marquee names like Matrix, Sequoia, TPG, etc. The DRHP filed earlier this month is touted to be at a $3+Bn valuation. Read on for the MSME opportunity & the Five-Star playbook.

We initiated an exhaustive coverage of Q2 financial services earnings starting last week. Our earnings dashboards present all earning highlights in a single place, in a visual and easy to consume format.

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.