Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

Five-Star Business Finance / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/five-star-business-finance" target="_blank" data-smartkarma-citation="entities:35238:1" rel="noopener">Five Star Business Finance (FIVESTAR IN)</a> is a NBFC based in India, specializing in providing financial services to small and medium-sized enterprises (SMEs) in the informal and semi-formal sectors. </li>
<li>The focus on in-house sourcing, collection, and risk management aids in maintaining strong asset quality.</li>
<li>In terms of valuations, FIVESTAR trades at a premium. However, considering its competitive moat and growth potential, any available opportunities should be capitalized upon.</li>
</ul>



Five Star Business Finance (FIVESTAR IN) is a NBFC based in India, specializing in providing financial services to small and medium-sized enterprises (SMEs) in the informal and semi-formal sectors. 
The focus on in-house sourcing, collection, and risk management aids in maintaining strong asset quality.
In terms of valuations, FIVESTAR trades at a premium. However, considering its competitive moat and growth potential, any available opportunities should be capitalized upon.


Five Star Business Finance (FIVESTAR IN) | A Five Star Business

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Five-Star Business Finance / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/five-star-business-finance" target="_blank" data-smartkarma-citation="entities:35238:1" rel="noopener">Five Star Business Finance (FIVESTAR IN)</a> raised around US$190m in its India IPO in Nov 2022.</li>
<li>Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



Five Star Business Finance (FIVESTAR IN) raised around US$190m in its India IPO in Nov 2022.
Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
In this note, we will talk about the lock-up dynamics and updates since our last note.


Five Star IPO Lock-Up - Over US$1.3bn Lockup Release with Less than US$1m ADV

<ul>
<li>
<a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a> lends to a customer segment exposed to high income volatility.</li>
<li>Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. </li>
<li>While there may not be any immediate asset quality issues, caution is warranted. </li>
</ul>



Home First Finance (HOMEFIRS IN) lends to a customer segment exposed to high income volatility.
Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. 
While there may not be any immediate asset quality issues, caution is warranted. 


Home First Finance (HOMEFIRS IN) | The Bounce Mystery & Way Forward

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.</li>
<li>One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.</li>
<li>Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.</li>
</ul>


Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.
One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.
Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.


AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

<ul>
<li>We interact with <a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a>  branch managers to understand the reason behind the increase in bounce rates.</li>
<li>The overall NACH data also shows a high rejection rate in October despite being a festive month, which is surprising.</li>
<li>With 92% of <a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a> loans being disbursed in less than 48 hours, this focus on TAT could lead to higher than industry-average asset quality issues. </li>
</ul>


We interact with Home First Finance (HOMEFIRS IN)  branch managers to understand the reason behind the increase in bounce rates.
The overall NACH data also shows a high rejection rate in October despite being a festive month, which is surprising.
With 92% of Home First Finance (HOMEFIRS IN) loans being disbursed in less than 48 hours, this focus on TAT could lead to higher than industry-average asset quality issues. 


Home First Finance (HOMEFIRS IN) | Bounce Rate and Sales Pressure

India

Aavas Financiers Ltd. is a retail-focused housing finance company primarily serving the low and middle-income segments, particularly self-employed individuals, in semi-urban and rural areas of India. The company specializes in providing home loans, including for construction, purchase, renovation, and extension, along with MSME loans and loans against property, to customers often excluded from formal credit due to a lack of documented income. Aavas Financiers Ltd. is headquartered in Jaipur, Rajasthan, India, and was founded on February 23, 2011.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Aavas Financiers (AAVAS IN)

Five Star Business Finance (FIVESTAR IN) | A Five Star Business

FIVESTAR focuses on in-house sourcing, strong collections, and risk management for robust asset quality and offers growth potential despite trading...

Pranav Bhavsar

Five Star IPO Lock-Up - Over US$1.3bn Lockup Release with Less than US$1m ADV

Five Star Business Finance (FIVESTAR IN) raised around US$190m in its India IPO in Nov 2022. Its US$1.3bn worth IPO lockup expiry is coming up soon.

Sumeet Singh

Home First Finance (HOMEFIRS IN) | The Bounce Mystery & Way Forward

Affordable housing lenders like HOMEFIRS typically lend to vulnerable customers. Despite efforts, customer behaviour may not change and pose risks...

Pranav Bhavsar

AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice...

Brian Freitas

Home First Finance (HOMEFIRS IN) | Bounce Rate and Sales Pressure

We interact with our channels at Home First and industry professionals to understand the trend in bounce rates, demand environment and competitive...

Pranav Bhavsar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)