Here is the List of Reviews from brokerages on Muthoot Finance,
Anand Rathi,
Looking at the past business growth, its brand value, leadership position along with expansion plans going ahead gives a brighter outlook for the company. Also currently it is trading at ~19x PE (8mFY11) compared to its peer which is trading at higher PE of 25x (9mFY11) makes the company attractive. We suggest SUBSCRIBE.
HSBC InvestDirect,
To conclude, we feel Muthoot Finance Limited has few concerns over gold price fluctuation and RBI policy norms , however, it leverages on strong NIM margins, better asset quality, attractive ROE and ROA followed by a reputed brand name with the management’s expertise, which balances the cart. So we suggest the investors to subscribe the issue for listing benefits as well as long-term gains.
Ajcon Global,
We believe the stock valuation of P/BV – 3.2x at the upper end of the price band of Rs. 175 is
justified, because of the following reasons:
a) MFL being the market leader in gold financing business, b) Early mover advantage in gold financing business and strong brand in southern India,
c) Strong fund raising capabilities at competitive rates, d) Diversifying presence in northern and western parts of the country,
e) CRISIL and ICRA rating of 4, indicating above average fundamentals, f) Larger presence (2,611 branches) with a higher scale in terms of gold loan portfolio of Rs.128.9bn as compared to its peer Manappuram General Finance Ltd. (MGFL) with 1,800 branches and gold loan portfolio of Rs.65bn,
g) No offer fior sale by PE players and Preferential allotment to private equity players(Matrix Partners India Investments, LLC and The Wellcome Trust) on September 23, 2010 at Rs.173.5 instills confidence and provides a comfort on the valuation front We recommend ‘SUBSCRIBE’ to the issue for short term listing gains.
Prabhudas Liladhar,
MFL is well poised to tap the strong growth opportunities in the rapidly growing gold loan market, given its robust distribution strength and strong brand. MFL is expanding its footprint by diversifying its presence into the non‐Southern regions. Although return ratios are likely to compress in the near term on account of capital raising, we expect it to still remain higher compared to other financing companies (we expect RoEs to remain in the region of 25‐30% in the medium term). Moreover, despite steep asset growth witnessed in the past (72.4% CAGR for MFL during FY07‐10 v/s industry CAGR of 43%), we expect MFL to continue to outpace industry growth. Valuations remain reasonable, we recommend ‘Subscribe’.
Mehta Equities,
We believe MFL is a pure gold play in the burgeoning Indian consumer Gold Loan market with is growth 15-18% CAGR. We are positive on the business outlook on the loan against gold. With the above rationale like Strong brand, track record and management expertise, we advice investors to park there investment with a medium-to-long term horizon. With less competition in the business segment MFL is well set in its segment because of it brand loyalty they have retained in the south Indian states. Now main focus is to penetrate the North Indian markets by adopting new strategies and also increasing sales from other investment alternative. Comparable peers like Manappuram and other NBFC are trading at price to earnings multiples of 18-23x and MFL is available at 18x. Hence, we recommend investors to subscribe for the IPO.
FairWealth Securities has the following recommendation,
Post issue, at the price of Rs 160 and Rs 175, the stock discounts its FY11 annualized earnings (a share of Rs. 10) by 19.2x and 21.0x respectively. Hence,
considering attractive valuations and the strong earnings growth potential, we recommend investors to subscribe this issue. We expect gain of 15%-20% on its listing.
SPA Securities India says,
We expect MFL to post an EPS of INR 14.81 and ABV of INR 50.19 for FY11E. This makes it trade at 12x and 3.5x its P/E and P/ABV at higher price band. We believe the current pricing captures the likely growth of MFL, we recommend “SUBSCRIBE”.
MSearch has the following Recommendation on the IPO,
With less competition in the business segment MFL is well set in its segment because of it brand loyalty they have retained in the south Indian states. Now main focus is to penetrate the North Indian markets by adopting new strategies and also increasing sales from other investment alternative. Comparable peers like Manappuram and other NBFC are trading at price to earnings multiples of 18-23x and MFL is available at 18x. Hence, we recommend investors to subscribe for the IPO.
IndiaInfoline has the following Recommendation,
With immense potential for growth in the organized gold loan market, we believe a) early entry and leadership position in this niche segment b) wide spread geographical reach with presence primarily in rural and semi-urban markets c) lower LTV ratio (60%-90% of the gold content of the jewellery) with
adequate collateral d) smaller ticket size with loan portfolio at less than 1-year, e) adequate capital with healthy return ratios and f) minimal concerns on asset quality with NPA recognition policy, should drive valuations for the company. SUBSCRIBE.
KR Choksey has the following Views,
On FY12e estimates, Muthoot Finance issue is quoted at 2.3x FY12 book value and 9.3x FY12 earnings. We believe market leader position, medium term superior return ratios and strong business growth outlook deserve premium valuation. Hence we recommend to subscribe the issue with medium term
investment objective.
