Aasaan Loans IPO Review 2024

Aasaan Loans IPO Review: Akme Fintrade India Ltd (Aasaan Loans) is preparing for its initial public offering (IPO). The IPO will open for subscription on June 19, 2024 and close on July 21, 2024. In this article, we look at Aasaan Loans IPO Review 2024 and analyze its strengths and weaknesses. Read on to find out!

Aasaan Loans IPO Review – About Us

Established in 1996, Akme Fintrade India Ltd is a Non-Banking Finance Company (NBFC) with over 20 years of experience in rural and semi-urban lending in India. The portfolio includes vehicle finance and business finance products designed for small business owners.

Operating in rural and semi-urban areas across Rajasthan, Maharashtra, Madhya Pradesh and Gujarat, the company is headquartered in Mumbai, Maharashtra with its registered office at Udaipur, Rajasthan. Akme Fintrade India Ltd served over 200,000 customers through 12 branches and over 25 points of presence, including digital and physical branches.

The company specializes in financing the purchase of new two- and three-wheelers, including scooters, motorcycles and auto-rickshaws, for both salaried professionals and self-employed non-professionals.

Aasaan Loans IPO Review – Industry Overview

The NBFC’s assets under management are expected to experience single-digit growth (around 7-8%) in fiscal 2024. This growth can be attributed to NBFCs’ continued focus on providing credit facilities to consumer segments with low banking penetration. , as well as the continued demand for credit in the retail sector.

Ongoing investments in technological infrastructure and improved internet accessibility are expected to drive the growth of NBFCs in the coming years. There is also expected to be continued demand from the retail sector, especially home and vehicle loans, which will further boost the growth of the NBFC sector.

In recent times, many NBFCs have seen improvements in liquidity, capital and provisioning, enabling them to capitalize on growth opportunities amid rising economic activity. But they will face competition from banks.

The recent change in RBI’s NPA recognition criteria to daily maturity date instead of month-end will have an impact on asset quality, leading to an increase in GNPA due to revisions in income recognition, asset classification and provisioning norms.

This will have a significant accounting impact as the improving economy is not expected to worsen borrowers’ credit standing and ultimate credit losses are not expected to change significantly.

Aasaan Loans IPO Review – Finance

A look at Akme Fintrade India Ltd’s financials shows that the company earned huge interest income in FY20, which declined in subsequent years.

The total interest income earned by the company decreased from Rs.84.16 crores to Rs.63.10 crores from FY21 to FY23. However, the reduction in the company’s PAT was much lower due to the company’s reduced financial costs. The company recorded a net profit of Rs.15.80 crores in FY23 as against a net profit of Rs. 16.30 of FY21.

During the nine months ended FY24, the company recorded gross interest income of Rs.50.77 crores and net profit of Rs.12.24 crores. For GNPA, the ratio increased from 3.57% in FY21 to 3.94% in nine months of FY24. This means that customer defaults against businesses have increased.

When it comes to returns, the company recorded a reported ROA increase of 4.05% in FY23. On the other hand, the company’s ROE decreased from 12.52% in FY21 to 7.72% in FY23, indicating low return on invested capital. Shareholder.

The image below shows Akme Fintrade India Ltd’s key performance indicators.

Key players in the market

The image below shows the comparison between Aasaan Loans and its listed industry peers.

Company Strengths

• The company has a long history of serving high-growth potential rural and semi-urban markets and has maintained a track record of financial performance and operating efficiency, with consistently high customer acquisition and retention rates and low-cost expansion into lower-cost regions.
• The Company has a strong, experienced and committed management team, including KMP, with significant industry experience to capitalize on future growth opportunities.
• The company primarily focuses on providing products and services to low- and middle-income customers. This allows you to deeply understand your target audience and meet their financial needs.
• The Company adopts a diversified financing base that minimizes borrowing costs through prudent asset and liability management and effective liquidity management.
• The Company’s customer due diligence process includes several levels of checks and controls designed to assess the quality of the customer and ensure that the customer meets stringent selection criteria, and includes a comprehensive assessment of the customer’s ability to repay and a detailed cash flow analysis of the customer. It’s possible.

company’s weaknesses

• The Company’s operations are concentrated in the state of Rajasthan, and any difficulty in expanding its operations or pursuing new business opportunities in new geographies and markets could have a negative impact on its operating results.
• The company has a high level of NPAs compared to some of its peers and therefore, inability to deliver on such high levels of NPAs may have a negative impact on the company’s business.
• The company has not complied with certain RBI norms/guidelines in the past. Failure to comply with the norms/guidelines of RBI or violation of regulations prescribed by RBI. RBI The Company may be subject to certain penalties and restrictions.
• Secretarial records of previous securities allotments and specific forms cannot be found in company records or MCA portal. This may lead to legal or regulatory action against the Company in the future.
• The Company’s credit ratings are currently low and any future credit rating downgrades could have a negative impact on its ability to repay its debt and obtain future financing.

Aasaan Loans IPO Review – GMP

Shares of Akme Fintrade India Ltd were trading at a premium of 27.50% in the gray market on June 18, 2024. The stock was lagging at Rs.153. This is a premium of Rs 33 per share to the ceiling price of Rs 120.

Aasaan Loans IPO Review – Key IPO Information

promoter: Nirmal Kumar Jain, Manju Devi Jain, Dipesh Jain and Nirmal Kumar Jain HUF.

Book Operations Lead Manager: Gretex Corporate Services Limited

Proposal registered by: Bigshare Services Private Limited

purpose of the problem

The NBFC plans to utilize the net proceeds from the IPO for the following purposes:

• Expand the Company’s capital base to meet future capital requirements expected to arise as a result of business and asset expansion.
• A portion of the net proceeds will be used to cover issue-related costs.
• In addition, benefits such as listing on the stock exchange and enhancement of the company brand are expected.

conclusion

In this article, we have looked at the details about Aasaan Loans IPO Review 2024. The company boasts a long-standing presence in rural and semi-urban markets, a diversified funding base, and a strong management team, but it also faces challenges such as: Due to higher levels of NPAs, past non-compliance with RBI norms and poor credit rating.

Applying for an IPO? Let us know in the comments below.

Written by Aaron Barth

By leveraging the Stock Screener, Stock Heatmap, Portfolio Backtesting and Stock Comparison tools on the Trade Brains portal, investors have access to comprehensive tools to identify the best stocks, stay updated and informed with stock market news. invest.