Equitas Holdings (Equitas) is a diversified financial services player with presence across microfinance, vehicle & MSE finance and housing finance. With a humble start in 2007, it has emerged as the fifth largest micro finance player in a short period of time. Equitas is amongst the ten players to have received a small finance bank license from the Reserve Bank of India (RBI). The company has a presence in 11 states through 539 branches, is backed by a strong Management team and with it being the second IPO in the micro finance segment, we expect strong subscription responses to the issue.
Angel Broking has recommended 'Subscribe' to IPO of Equitas Holdings. Commenting on the investment rationale, the stock broker said, ''At the upper band of the offer price Rs 110 the issue is priced at 1.8x its diluted BV of Rs 60 (pre-dilution 2.3x).
The company has decent ROE and ROA of 13% and 3.1%. Though post conversion to a SFB the return ratios might be compressed, while 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 Subscribe to the issue.''
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