This Report on Satin Creditcare was sent to our premium clients about 2 Months back on the 30/May/2016 at CMP 350
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SATIN CREDITCARE NETWORK
THESIS
At Stallion Asset we normally look for companies that can
1) Grow at 25% plus for long periods of time (opportunity size)
2) Generate High ROCE
3) Smart and Ethical Management
4) Reasonable valuations
We believe Satin Credit care Network has the above traits. Satin has a sizeable share in the under penetrated markets of Northern India. The Microfinance Industry is expected to grow at 30%+ rates for next 5 years. Satin enjoys lower compliance/ regulations, capex requirements as compared to peers like Ujjivan who have just received a small bank licence. We strongly believe that growth is sustainable in this sector for long periods of time.
History –
Microfinance Industry can be divided in 3 phases after RBI gave permission for setting up microfinance in 2000
1) Phase 1 – (2000-2010)-Initial Growth phase where MFI AUM grew at 100% CAGR to INR 163 Billion.
2) Phase 2 – (2010-2012) – Following reports of suicides by some women borrowers; the AP government passed an ordinance in Oct’10 restricting the activities of MFIs in terms of new disbursements and collections. The cause of the borrowers was supported by some political parties, which led to a mass default in AP. Microfinance companies lost 30-40% of their outstanding portfolio in the sector due to this mass default. Most microfinance companies which had significant exposure to AP went bankrupt after the mass default.
3) Phase3 – (2012-Present) – Revival after Regulation – The microfinance industry stood back on its feet with loan growth of more than 50% CAGR. The RBI announced setting up of small finance banks last year. MFIs were the favorites with the RBI, grabbing 8 of 10 small finance licenses.
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Today as i right this Blog Satin Creditcare is trading at 704, 101% gain from our buy price. This report is for education purpose and just wanted to showcase our research. We strongly recommend you get in touch with us if you motive is wealth creation.
