APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC 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

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<li>
<a href="https://www.smartkarma.com/entities/sbfc-finance-limited" target="_blank" data-smartkarma-citation="entities:36713:1" rel="noopener">SBFC Finance Limited (1547353D IN)</a> is looking to raise up to US$131m in its India IPO. </li>
<li>SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. </li>
<li>In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.</li>
</ul>



SBFC Finance Limited (1547353D IN) is looking to raise up to US$131m in its India IPO. 
SBFC Finance is a systematically important, non-deposit taking non-banking finance company (NBFC-ND-SI), offering secured MSME Loans and Loans against Gold. 
In our previous note, we looked at the company’s past performance. In this note, we talk about RHP updates, undertake a peer comparison and provide our thoughts on valuation.


SBFC Finance IPO - RHP Updates, Peer Comparison and Thoughts on Valuation

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

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<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> is a technology-driven affordable housing finance company (HFC) focused on first-time homebuyers in low and middle-income groups. </li>
<li>We believe access to finance is more relevant rather than quick TAT and hence question the relevance of wanting to be the fastest provider.</li>
<li>Considering the fading competitive advantage, borrower profile and segment dynamics, HOMEFIRS may be the fastest but not necessarily the safest.</li>
</ul>



Home First Finance (HOMEFIRS IN) is a technology-driven affordable housing finance company (HFC) focused on first-time homebuyers in low and middle-income groups. 
We believe access to finance is more relevant rather than quick TAT and hence question the relevance of wanting to be the fastest provider.
Considering the fading competitive advantage, borrower profile and segment dynamics, HOMEFIRS may be the fastest but not necessarily the safest.


Home First Finance (HOMEFIRS IN) | Irrelevant Mission, Fading Moat

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

<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

<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

HomeFirst Finance is a technology-driven housing finance company in India, specializing in affordable housing loans. It provides home loans, mortgage loans, and home construction loans primarily to first-time homebuyers in low and middle-income groups. The company was founded in 2010 and is headquartered in Mumbai, Maharashtra, India.

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HomeFirst Finance (HOMEFIRS IN)

SBFC Finance IPO - RHP Updates, Peer Comparison and Thoughts on Valuation

SBFC Finance Limited (1547353D IN) is looking to raise up to US$131m in its India IPO. In this note, we talk about RHP updates, undertake a peer...

Ethan Aw