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IndoStar Capital Finance IPO Review – Good for Long Term

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IndoStar Capital Finance ipo to start from 9th May and ends on 11th May. The company is a Non-banking finance company to raise around 1840 crore rupees via initial public offer. The company looks good for the long term bet. They have good management and experience in the business will give more boost in coming years.

The company founded in 2010 who provides lending services to small and medium sized corporates and companies. They are registered with SEBI as a systemically important non-deposit taking company.

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The object of the issue is to meet the future capital requirements. The company’s 91.55% stake is with company promoters while 8.45% stake is with public and others. Promoters will reduce their stake to 58.95%. The other and public stake will increase to 41.05% after ipo. The ipo price is been 570-572 per share which looks fine as per the company financial.

The company has well established lending business with SMEs and they are achieving high asset quality via  robust credit assessment and risk management framework. They already doing well in their finance business and its proven with the track records.

The risk is as their NPAs which might increase but we are not sure about it. The company has given loans to SMEs which might be risky but it might not. They have other risk of Vehicle finance and housing finance business which need to prove in coming years.

IPOWatch – IPO Review:
IndoStar Capital Finance IPO has good to go with long term while in short term the gain might narrow.

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