Subscribe to CreditAccess Grameen Ltd: Hem Securities

August 08
03:33 2018

Co is a leading Indian micro-finance institution headquartered in Bangalore, focused on providing micro-loans to women customers predominantly in Rural Areas in India. Co’s focus customer segment is women having an annual household income of ?160,000 or less in Urban Areas and ?100,000 or less in Rural Areas. Co’s Promoter is CreditAccess Asia N.V., a multinational company specializing in MSE financing (micro and small enterprise financing), which is backed by institutional investors and has micro-lending experience through its subsidiaries in four countries in Asia.

Valuation and Outlook

The company is bringing the issue at p/b multiple of 2.94 on post issue book value at higher end of price band of Rs 418-422/share. Although co has shown strong growth with CAGR of more than 50% from FY14 to FY18 in its financials added by solid fundamentals as some of the co’s ratios are one of the best in industry but low ROE which will dilute post listing is a concern . Hence, we rated issue a “Subscribe” one with limited upside potential.

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