Mas Financial Services IPO: Brokerage Views & Run up to IPO

MAS Financial Services
This post on Mas Financial Services IPO tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on Mas Financial Services IPO and shall be updated continuously till the closure of the issue. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Mas Financial Services IPO or not.

Related Posts: Mas Financial Services IPO Review: NBFC Play
Mas Financial Services IPO: Grey Market Premium etc.

09/10/17 Grey Market Premium Rs. 200,  Kostak (Application rate)-  Rs. 500
05/10/17 Grey Market Premium Rs. 170-180,  Kostak (Application rate)-  Rs. 350-400

Subscription: Mas Financial Services IPO  ( x times)
  QIB NII Retail Total
Day 3  148.33  378.53  15.97  128.39
Day 2   5.74 0.47  6.29 1.84
Day 1 1.78 0.22 1.02 1.06
Complete Anchor List

Anchor Investors (AIs) portion in the Public Issue of MAS Financial Services Limited, for 29,61,057 equity shares have been subscribed today by 15 AIs at Rs. 459/- per equity share. The Anchor Investors in the order of their investment include: The Nomura Trust and Banking Co Limited, Hdfc Equity Saving Fund, Icici Prudential Equity Income Fund, Sbi Magnum Monthly Income Plan , Sbi Long Term Advantage Fund, Sbi Banking & Financial Services Fund, Sbi  Resurgent India, Opportunities Scheme, JP Morgan Smaller Companies Fund, Wasatch Emerging India  Fund, Birla Sun Life Banking  and Financial Services Fund, Dsp Blackrock Balanced Fund, Dsp Blackrock Equity Fund etc.
Click here for Complete Mas Financial Services Anchor Investors List

Consolidated opinion of Brokerages, Analysts, Business New Paper Reports, Management Views on Mas Financial Services IPO .

Angel Broking: “ Close peers, Capital First and Shriram City Union Finance are trading at ~3x FY2017 book, however both the companies report moderate ROE of 11%. At the upper end of the price band, MAS is valued at 6.85x of FY2017 book value (Pre-IPO) and on post dilution basis at 4.1x of Book value. Although valuations are on the higher side, looking at the strong and sustainable growth and ROE prospects of the company, we recommend a Subscribe to the issue. “

BP Wealth: “At the upper price of price band the company is valued at 4.3times its
book value post dilution which has been in-line with other SFBs(like AU small finance bank) and high growth NBFCs. The company with its major book in MSME sector has been able to carve out its niche with strong under writing and execution evident from fact of 1% GNPAs in sector where proper documentation and compliance is not proper. The company has grown in double digit historically and has diluted only twice in last 20 years which is quite credible. MAS continues to generate healthy return ratios (RoA of 3.3% and RoE of 18% and NIM of 7%) which have led to better profitability. Gujarat and Maharashtra account major concentration of AUM geography wise normal monsoon in both stats is expected to be beneficial for Agri-input and equipment portfolio which is recent business foray. Hence we assign subscribe ration for IPO for listing gains. “

Capital Market: ” Score 46/100, Post-issue, the book value (BV) works out to Rs 122.8 at the issue price of 456 and Rs 122.9 at the issue price of Rs 459. P/BV at both the bands works out to 3.7 times. Post issue adjusted BV (net of net NPAs) works out to Rs 117 per share and P/Adj BV works out to 3.9 times. Among peers, Shriram City Union Finance is trading at P/BV of 2.7 times (Price: Rs 2037.7, BV: Rs 762.6). Mahindra and Mahindra Financial Services at P/BV of 3.7 times (Price: Rs 422.1, BV: Rs 114.6) and Capital First at P/BV of 3 times (Price: Rs 733, BV: Rs 244).”

Choice Broking: The company is witnessing declining trend in margin as NIM declined to 7.0% in FY17 from 10.5% in FY13 mainly due to the decline in yield on advances. Amidst the prevailing low interest rate scenario and high competition, strong improvement in margin cannot be expected. Though RoE of MFSL stood at 26.6% in FY17, if we readjust it with postissue net worth it normalize to around 12% and come in line with capital first (RoE at 11.8% by FY17 and Shriram City Union Finance (RoE at 11.9% by FY17). Considering all these parameters, we are of the view that at P/ABV (x) of 4.5, the issue is aggressively priced leaving limited room for further upside. Thus, we assign ‘Subscribe with Caution’ rating to the issue”

ICICI securities: “At the upper price band of Rs. 459, MASFS is available at a multiple of 4x Q1FY18 BV (post issue). MASFS possess fundamental strength with
robust growth in advances, steady asset quality and healthy return ratios. We advise investors to SUBSCRIBE to the issue.”

Prabhudas Lilladher: “MAS Financial Services (MASFIN) is Gujarat based NBFC lending to middle & lower income segments mainly to Micro enterprises, SME and individuals with AUM of Rs34.5bn as of Jun’17. It currently operates in six states & Delhi NCR with a combination of branches and sourced business through affiliations helping leverage its know‐how for lending to riskier segment. At the upper band of Rs459, the company trades at 3.6x post issue BV of Rs130 which is fairly priced in our view compared to peers and recommend to subscribe this issue for long term investment horizon for superior return ratios and strong lending growth..”

Religare Sec: “The company is well-capitalized with CRAR of 23.8% on a standalone basis, of which Tier-I capital was 18.5% as of June 2017. NIMs have consistently remained in the healthy range of 16.7% to 19.1% over the last few years. As of 30 June 2017, MFSL’s cost of borrowing stood at 9.05%, as a result of its excessive reliance on short term bank loans. This is likely to come down following the IPO as the company will use proceeds to augment its capital base.MFSL has a track record of double digit revenue and profit growth and ROE of >20%. Asset quality has been stable with NPAs in the range of ~1% over last 3 years. At the upper end of the price band, the stock is valued at ~4x P/BV.”

SMC : “Rating 2.5/5 On the lower end of the price band of Rs.456, the stock is priced at pre issue P/E of 32.60x on its FY17 EPS of Rs. 13.99. Post issue, the stock is priced at a P/E of 35.94x on its EPS of Rs. 12.69. Looking at he P/B ratio at Rs. 456, the stock is priced at P/B ratio of 5.70x on the pre issue book value of Rs. 80 and on the post issue book value of Rs. 115.21, the P/B comes out to 3.96x.”

SP Tulsiyan website: “While issue pricing is not the most attractive, strong fundamentals and large capital infusion (via pre-IPO and fresh issue) should ensure healthy growth rates going forward. Market frenzy for high growth NBFC stocks should also help the issue sail through comfortably. Hence, it is a subscribe.

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