Indostar Capital Finance IPO Closes 11th May: Should you invest?

The slackness of the demand in the domestic market, poor economic sentiment, financial irregularities and scams has threatened the IPO market. Though the IPO market is showing the signs of fatigue, but the experts point out that soon the markets are going to buzz again. Under such jolts and turmoil, the non-banking finance company IndoStar Capital Finance IPO will open on May 9^th 2018. Here is a review 

Company Profile

IndoStar Capital Finance is an NBFC company registered with the Reserve Bank of India that is engaged in offering loans to the corporates, SME borrowers, home finance and vehicle finance. The company is sponsored by various financial institutions like Everstone Capital, Goldman Sachs, Baer Capital Partner, ACPI investment, CDIB Capital International Corporation.

The company has 10 branches through which it conducts the retail operation across Delhi, Mumbai, Bengaluru, Surat, Ahmedabad, Pune, Jaipur and Indore. The lenders of the company include 14 public sector banks, 13 private sector banks, 21 mutual funds distributor and four insurance companies.

Purpose of IPO?

The company primarily intends to use its net proceeds to meet the future capital requirements.

Sneak peek at the financial details

The company has registered revenue of Rs 241.5 crore, with a profit of 90 crores in March 2013 and Rs 715.5 crore, with a profit of Rs 207 crores in 2017. In 2017, the EPS is Rs 28.4 and last 3 years EPS is Rs 26.7.

Particulars	For the year/period ended (in Rs. Millions)
	31-Mar-17	31-Mar-16	31-Mar-15	31-Mar-14	31-Mar-13
Total Assets	54,853.65	46,922.73	39,916.86	31,608.02	22,070.85
Total Revenue	7,155.42	6,413.79	5,280.56	3,969.05	2,415.77
Profit After Tax	2,090.38	1,910.16	1,490.65	1,121.36	900.94

IPO Details

The issue will comprise of fresh issue aggregating to Rs 700 crore and an offer for sale of upto 2,00,000 equity shares. The upper band limit of the OFS amounts to Rs 1,144 crore. The promoters plan to sell up to Rs 18,508,407 equity shares while other share- holders in the NBFC will offer 1,491,593 equity shares in the OFS. The current shareholders of the company include Everstone Capital, Beacon India Fund, CIDB Capital and ACPI Investment Manager.

• Issue Open: May 9, 2018 – May 11, 2018
• Issue Type: Book Built Issue IPO
• Issue Size:
  Fresh Issue of [.] Equity Shares of Rs 10 aggregating up to Rs 700.00 Cr
  Offer for Sale of 20,000,000 Equity Shares of Rs 10 aggregating up to Rs [.] Cr
• Face Value: Rs 10 Per Equity Share
• Issue Price: Rs 570 – Rs 572 Per Equity Share
• Market Lot: 26 Shares
• Minimum Order Quantity: 26 Shares
• Listing At: BSE, NSE

Should you invest in IndoStar Capital Finance IPO?

Though the company has a robust track record in the SME financing along with proven track record of delivering results and a well-diversified funding profile, but the corporation is vulnerable to the market volatility. It is regulated by the laws and regulations of financial services in India and any change in the law can adversely affect the business results.

There is a pending litigation against the company and if odds are turned into favor it could hamper the investor’s sentiment.  Some of its group subsidiaries have resulted into the losses into the past, so the investor should invest in this IPO at its own risk.