Micro finance is developing in
in Indian stock market as a new theme.
In a country like
with huge rural India
population ,significance and scope of
micro finance is vast. Unfortunately ,
the main microfinance companies are still
unlisted and no scope for retail investors.
But it is a fact that a number of
foreign funds and P/E players are already
invested in such unlisted entities. We have
also three listed players in this sector
even they are not big in size. One such known
name is SE Investment. This company was in
news recently that its 40 Mn GDR issue
subscribed in just 8 hours.This clearly shows
the appetite of foreign investors in companies
from this sector. SE investment already given
almost 1000% return in two years.So let us
check other two companies from this space ,
First is Capital trust and next will be
Earlier I have recommended this scrip
through MMB when it was @ RS.13/- and
recommend a profit booking around Rs.30/-.
At present it is quoting around Rs.70/-.
Since there is lot of happenings in the company
and this sector after that now it need re -looking
into it. Capital Trust is a Delhi based company
started its operations way back in 1985.
It was jointly promoted by Mr. K. R. Puri
(Former Governor, Reserve
Bank of India), Justice M. H. Beg
(Former Chief Justice of India), Mr. S. D. Varma
(Former Chairman, Allahabad Bank) and
Dr.A.M.Khusro (Former Member
Planning Commission). Its operations were
only as an NBFC till 2009.Now there was a
change in management after the promoter
holding bought out by IC Constructions
Services Ltd.They also came out with
an open offer at a price of Rs.10/-, and now they
holds about 70% stake in this company.
After the take over by new management ,now company
ceased all other financing
operations and started Grameen based joint
liability based microfinance. Company is now
operating on the rural markets in UP, Rajasthan
and Madhya Pradesh and Chattisgarh.
It has 23 branches and 150 staffs as on date.
Now the new management seems to be taking serious
efforts to grow this company in microfinance sector.
As part of their efforts in this line, now they are
inducting experienced hands from banking sector in
their board. Recently company inducted Mr.J S Tomar
in the board who served Oriental Bank of Commerce
for 34 years and rose to the position of
General Manager, holding charge of the departments
of Rural Development and Priority Sector,
Planning & Development and Recovery Management.
He also pioneered the first pilot in Grameen based
microfinance launched by any commercial bank
in 1995. He also headed the Microfinance India
Department of the Reserve Bank of
as Officer India
on Special Duty.(from company web site)
Again, the company has taken lot of
steps to improve the business which
includes writing off of Rs.1.6 Cr NPA generated
in old business to clean the balance sheet,
fresh fund raising for business expansion..etc.
Now capital trust is expanding
into five more states and targeting
a mini branch network of 1585 and loan
outstanding of Rs.13700 mn
by 2015.Company has recently appointed
New York based Cedar Street Capital, to raise
Rs 200 million foreign equity and Rs 360 million
debt for its expansion plans.
Considering the efforts and signals from
the new management Capital Trust is expected
to be a money spinner even from this level.
Risk takers can buy in small lots.
Coverage on the other company in next two days