Question on Succession planning
None of my family members want to join the business after me, So the board will identify and select a professional, it will be professionally run and, I would be only an investor after I exit.
Could succession plan be a potential reason for the long consolidation and downtrend in this stock? There has been a change in leadership with Mr. P Balaji joining as MD and the promoter, Mr. Anandhan has elevated himself as a chairman, however the market does not seem to be convinced with succession plan.
The financials have only grown from good to great and current valuation of 4x book does not look exorbitant for a company that delivers ~8% ROA and ~16% ROE and has ~1.1x leverage, coupled with ~30% AUM growth visibility for the next few years, along with <1% NPAs. Yields are great too and CoF is decent compared to other HFCs. NIM is fantastic.
Is Geographical concentration a concern? The leadership is quite clear that they do not want to grow PAN India and want to go deeper into existing geographies (TN, AP and KA) and only grow into adjacencies (OR, MH and CH).
Is the market discounting the possibility of a M&A (Chola?) or equity dilution by the PE players in series of blocks in near team?
I’m quite curious and keen to learn what others see in Aptus in terms of valuations and future growth potential and what are the potential risks? (Over and above what is covered in this fantastic thread)
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