Ujjivan Financial Services IPO / Public Issue all the brokerage and Research Analysts Review Recommendation are as summarized below for the benefit of Retail Investors. Do consult your SEBI Registered Financial Adviser before Investing.
Nirmal Bang Analyst Hatim Broachwala, said
The company primarily operates through a joint liability group-lending model for providing collateral-free small-ticket loans to economically active women. The company also offers individual loans to micro and small enterprises. Investors Can Subscribe. Given the decent return ratios, valuation of UFSL stock at 2.2x P/ABV based on trailing numbers is quite attractive. However in long run, we continue to prefer SKS Microfinance within microfinance space.
Prabhudas Liladhar Analysts Vidhi Shah, Pritesh Bumb and Nitin Kumar said,
At upper band of Rs210 UFSL will trade at 1.6x based on post‐issue book value of Rs130 which we believe is fairly priced. We recommend investors to subscribe to the issue.
KR Choksey analyst Shweta Daptardar have the following view,
With a successful track-record attributed by higher customer retention rates, customer led branch expansion, enhanced employee productivity; strong individual loan trajectory, lower credit costs and improved operational efficiencies reinforce our belief in the earnings traction going forward. We, therefore, advise to SUBSCRIBE for the said IPO both for listing gains and to reap long term benefits.
GEPL Capital Research in a note said,
Ujjivan Financial Services Ltd ( Ujjivan) is available at the IPO price band of Rs207 to Rs210 which is available at 1.8 P/BV multiple. We believe that this valuation looks cheaper. So we recommend Subscribe to this IPO.
Motilal Oswal in a Note Said,
Ujjivan's AUM has compounded at 71% CAGR from INR 1126cr in FY13 to INR 3274cr in FY15. The company's asset quality is impeccable with GNPA of 0.15%. Robust ROA of 3.7% and ROE of 20.4% further strengthens the company's successful business model. The company is valued at a trailing P/B of 2.2x which is at a 61% discount to SKS Microfinance and a 21% discount to the recently listed Equitas. Ujjivan's financial metrics are better than that of Equitas and is available at discounted valuations.
Destimoney Securities Analyst has the following view,
In 9MFY16 the company, has already surpassed its Total Income and PAT numbers. The company clocked Rs. 7,132 mn total income in 9MFY16 vs Rs. 5,993 mn in FY15. PAT at Rs. 1,223 mn was higher in 9MFY16 than Rs. 758 mn reported in FY15. Extrapolating the 9MFY16 performance to full year levels and at post-IPO dilution at upper price of IPO band, UFSL is available at a P/E of 17.2x and P/B of 3.3x at FY16 estimates, which is cheaper than SKS (at 28.8 P/E) and Equitas (at 23 P/E). We recommend investors to SUBSCRIBE to the issue.
SPA Securities has the following recommendation,
There are ~57.7 million small business units, mostly individual proprietorships, which operate manufacturing, trading or services activities in India. At the higher band of issue price, the stock is valued at ~1.7x its FY16E P/BVPS. We feel that valuation is undemanding given its high growth trajectory and high RoE of ~20%. We recommend SUBSCRIBE for long term investors.
Angel Broking Analysts Siddharth Purohit and Chintan Shah have the following view
At the upper end of the offer price band ( RS 210), the issue is priced at 1.8x its diluted BV of Rs 118 (2.1x pre-dilution). The company has decent ROE and ROA of 19.9% and 3.6%, respectively. Although the return ratios might get a bit compressed post the company’s conversion to a SFB, but we expect the same to scale up subsequently. We believe the issue is attractively priced looking at the growth options the company offers in the long run. We recommend a SUBSCRIBE on the issue.
Monarch Capital Analyst Jyoti Khatri said,
The company has raised Rs3.1 bn prior to IPO which we have factored into our valuations. Post issue, it is trading at 1.45x BV (1.8x BV pre-issue). If we do not factor-in Rs3.1 bn raised pre-issue, P/BV multiple will be 2.1x BV pre-issue. We feel Ujjivan valuations are quite reasonable, hence, we recommend investors to SUBSCRIBE to the issue.
Reliance Securities Analyst Ashutosh Kumar Mishra said,
We expect, the new bank to deliver ROA of above 2.5% in next 2-3 years. Although, FIIs will not able to participate in the IPO but they can acquire the stock post listing, as post listing FII holding will fall below the 49% limit set by the RBI for SFBs. This may inturn create liquidity and fresh buying support on the counter upon listing. We suggest SUBSCRIBE from a long term perspective.
