(Industry: NBFC | https://www.suryodaybank.com)
Industry
|
NBFC (Small Finance Bank)
|
Website
|
https://www.suryodaybank.com
|
Company ISIN
|
INE428Q01011
|
FV per Equity Share
|
Rs. 10
|
Overview:
• Suryoday was established in year 2009 in Navi Mumbai, Maharashtra to operate as an NBFC after receiving license from RBI.
• In Aug 2016 Suryoday Micro Finance was among the 10 companies and the only company from Maharashtra to get “Small Finance Bank” license from RBI.
• After acquisition of small banking license and with approval from ROC the name changed from “Suryodaya Micro Finance Limited” to “Suryodaya Small Finance Bank (SSFB)” on 13th Jan,2017.
• SSFB provides services such as several types of loans facilities, account facilities and Digital banking to its new and existing customers.
• Suryoday Small Finance Bank launched its 1st bank on 23rd Jan, 2017 and started its banking operations. SSFB as on date has around 235 branches (217 MPI Branches + 16 Bank Branches) and is expanding its operations across India with customer base around 10 lacs+.
Key Investors
Network in India
Financial Snapshots-(Annual)
• Total Income of the company has increased by 52% on CAGR basis in 4 years.
• Profitability of the company has increased by 4% on CAGR basis in 4 years.
• Equity base of the company has increased in 2017 due to capital infusion by way of
• ESOP allotment (16900 shares) and additional equity allotment by way of Rights issues, Private Placement issues and Preferential Allotment (25560469 shares) at various prices aggregating to Rs. 289.27 Cr.
• Loans and Advances has grown by 51.65% on CAGR basis in 4 years.
Company has strong provision against rise in NPA over the years showing strong credibility.
• Div yield = 0% (The Bank is not paying dividend)
• Contingent liabilities -> Rs. 7.79 Cr.
• Book value per Share is growing at 24% CAGR and by assuming the same growth in BV/Share will continue the projection of BV for FY2019 ending is 94/Share and for FY2020 ending is 118/Share.
Year
|
BV/Share
|
FY2018
|
80
|
FY2019*
|
92
|
FY2020*
|
118
|
The Bank is planning for bringing an IPO in Mid-2020 and If we give the Average of Peers’ P/B which is 3.4, this brings Forward Value till Mid 2020 of Share is around 400. (118*3.4 = 400)
P/B*(FY20)
|
Value(FY20)
|
2.5
|
2.5*118 = 295
|
3
|
3*118 =354
|
3.5
|
3.5*118 = 413
|
4
|
4*118 = 472
|
Bank
|
P/B
|
HDFC Bank
|
5.36
|
Axis Bank
|
2.83
|
Ujjivan Small Finance Bank
|
1.89
|
Bandhan Bank
|
6.03
|
ICICI Bank
|
2.18
|
• CRISIL has assigned its 'CRISIL A1+' rating to the certificate of deposit programme of Suryoday Small Finance Bank Limited.
Strength
|
Weakness
|
·
Healthy
capitalization
·
Sound risk management systems
& processes
·
Expected
improvement in profitability
·
Displayed ability
to ramp-up deposit franchise
·
Extensive
experience of the board and senior management team
|
·
High reliance on
bulk deposits and low share of CASA / retail deposits in overall liability
profile
·
Average, albeit
improving, asset quality profile
·
Modest credit risk profile of
the borrowers and low seasoning in the non-microfinance portfolio
|
Summary
Macroeconomic environment
• Global economic development
The world economic growth for 2018 was at approximately 3% with rebound in investment, manufacturing activity and trade.
The global economy is expected to maintain this rough growth level through 2020. As a group, advanced economies are expected to slow in the coming years as they run up against full employment and as central bankers raise rates to contain inflation. It is expected that growth in advanced economies will slow from 2.3 per cent last year to 2.2 per cent this year and 1.7
per cent by 2020. Globally, the interest rate cycle is expected to increase due to increase in inflation and growth in advanced economies and might prove to be vulnerable to emerging market economies.
• India economic development
India's Gross Domestic Product (GDP) grew by a strong 6.7% year on year(y-o-y) growth in FY 2017-18, although slower as
compared to 7.1% in the last year. This GDP growth was mainly driven by strong performance of the services sector, that grew
by 7.9% y-o-y as compared to 7.5% y-o-y in the last year.
Retail inflation that was measured by Consumer Price Index (CPI) stayed broadly at 2.6% in the first half of FY18. The Government introduced Banking Regulation (Amendment) Bill, 2017 which authorizes RBI to issue directions to banks for initiating proceedings in case of a default in loan repayment.
• Banking sector outlook
During the year, Bank credit grew at 10.32% year-on-year to Rs 86.5 Lakh Crore from Rs 78.4 Lakh Crore in FY 2017 which indicate a revival in demand for funds.
There is significant increase in lending to retail loans as banks themselves are wary of funding corporate expansion plan.
The deposits increased by 6.7% to Rs. 114.7 Lakh Crore from Rs. 107.5 Lakh crore in the
year-ago period. The growth in deposits was lower than credit growth due to more attractive investment avenues such as
mutual funds. Gross non-performing assets ratio for scheduled commercial banks increased from 9.6% in March 2017 to 11.6% in March 2018 and are likely to increase further as per financial stability report (FSR) published by RBI in June 2018.
• Robust Risk Management; Good Governance and Compliance
The Company has spent a significant part of the last year in building robust
risk management across products, functions and processes and
will continue to further build upon this.
• Culture
A performance culture which drives innovation, responsiveness
and simplicity is the bedrock of Suryoday. A continued
investment into training and developing people will help the Company to
deliver a differentiated experience to their customers in a dynamic
and a competitive space.
• Digital Inclusion
Considering the access to technology available with the users, the design of our products and processes must be kept simple - both for the customers as well
as for the employees engaged in delivering that experience.
Therefore, the focus of the company will be to look within and digitize most of its
processes internally and externally.
• Deepening Customer Relationship
Together with doorstep service and digital platform, the intention this year is to
Deepen the customer relationship and offer the full suite of banking products to the customers. The company will be converting all its 215 Inclusive Branch outlets into banking outlets.
Top Ten Shareholders (Other than Directors, Promoters and holders of GDRS & ADRS):
happy family of .....
For downloading report.....
https://drive.google.com/file/d/1IT1JBeDXCqe5CQJPx4_EE86ytDZ59akj/view?usp=sharing
Macroeconomic environment
• Global economic development
The world economic growth for 2018 was at approximately 3% with rebound in investment, manufacturing activity and trade.
The global economy is expected to maintain this rough growth level through 2020. As a group, advanced economies are expected to slow in the coming years as they run up against full employment and as central bankers raise rates to contain inflation. It is expected that growth in advanced economies will slow from 2.3 per cent last year to 2.2 per cent this year and 1.7
per cent by 2020. Globally, the interest rate cycle is expected to increase due to increase in inflation and growth in advanced economies and might prove to be vulnerable to emerging market economies.
• India economic development
India's Gross Domestic Product (GDP) grew by a strong 6.7% year on year(y-o-y) growth in FY 2017-18, although slower as
compared to 7.1% in the last year. This GDP growth was mainly driven by strong performance of the services sector, that grew
by 7.9% y-o-y as compared to 7.5% y-o-y in the last year.
Retail inflation that was measured by Consumer Price Index (CPI) stayed broadly at 2.6% in the first half of FY18. The Government introduced Banking Regulation (Amendment) Bill, 2017 which authorizes RBI to issue directions to banks for initiating proceedings in case of a default in loan repayment.
• Banking sector outlook
During the year, Bank credit grew at 10.32% year-on-year to Rs 86.5 Lakh Crore from Rs 78.4 Lakh Crore in FY 2017 which indicate a revival in demand for funds.
There is significant increase in lending to retail loans as banks themselves are wary of funding corporate expansion plan.
The deposits increased by 6.7% to Rs. 114.7 Lakh Crore from Rs. 107.5 Lakh crore in the
year-ago period. The growth in deposits was lower than credit growth due to more attractive investment avenues such as
mutual funds. Gross non-performing assets ratio for scheduled commercial banks increased from 9.6% in March 2017 to 11.6% in March 2018 and are likely to increase further as per financial stability report (FSR) published by RBI in June 2018.
• Robust Risk Management; Good Governance and Compliance
The Company has spent a significant part of the last year in building robust
risk management across products, functions and processes and
will continue to further build upon this.
• Culture
A performance culture which drives innovation, responsiveness
and simplicity is the bedrock of Suryoday. A continued
investment into training and developing people will help the Company to
deliver a differentiated experience to their customers in a dynamic
and a competitive space.
• Digital Inclusion
Considering the access to technology available with the users, the design of our products and processes must be kept simple - both for the customers as well
as for the employees engaged in delivering that experience.
Therefore, the focus of the company will be to look within and digitize most of its
processes internally and externally.
• Deepening Customer Relationship
Together with doorstep service and digital platform, the intention this year is to
Deepen the customer relationship and offer the full suite of banking products to the customers. The company will be converting all its 215 Inclusive Branch outlets into banking outlets.
Top Ten Shareholders (Other than Directors, Promoters and holders of GDRS & ADRS):
Invest
|
% of Total Shares
|
Sarva Capital LLC
|
9.06
|
International Financial Corporation
|
6.50
|
3DWM (International) Mauritius Limited
|
6.40
|
ResponsAbility Participations Mauritius
|
4.70
|
Gaja Capital Fund II Limited
|
4.47
|
Ask Pravi Private Equity Opportunities Fund
|
4.40
|
Evolvence India Fund II Limited
|
4.40
|
TVS Shriram Growth Fund
|
4.29
|
Americop Ventures Limited
|
3.96
|
HDFC Standard Life Insurance Company Limited
|
3.82
|
happy family of .....
For downloading report.....
https://drive.google.com/file/d/1IT1JBeDXCqe5CQJPx4_EE86ytDZ59akj/view?usp=sharing
0 Comments