Sr No. | Particulars | Comments | |
---|---|---|---|
1 | Promoted By- | ||
Mr Deepak aggarwal - Chartered Account - Has affiliation with Equity firms, NBFC and Debt funds - Ex - BOA, KPMG, Founder Avancer capital (PE Fund) | |||
Mayur Modi - ex- HSB, JPMC | Associate director in HSBC | ||
2 | Has Requested to allow BOD to increase Borrowing limit from 500 crores to 1500 crores | > the current AUM is 400 crores | |
3 | BOD - | ||
Uma Shankar Paliwal - Rich Experience in Banking Ex- RBI and current Charimen/member in UV asset reconstruction and Fusion Microfinance and Dillip Buildcon | |||
Ratna Dharashree Vishwanathan - Director in Dillip Buildcon and Fusion Microfinance | |||
Other Memebers are mostly CA, IIM with good background | |||
4 | Most Underserved segment i.e. Lower ticket size segment → 50k - 300k in unsecured loan and 100k to 1 million in Secured loan | Financial Inclusion target for Indian Economy more competition is below 40000 ticket size loan as more than 230 lenders active in this segment | |
5 | 34 - 35% almost new customers - taking credit for the first time | New customers (taking loan first time)with low ticket are less likely to default on their loan | |
6 | Have opened 61 Branches with in 4 years of starting of business | ||
7 | Target AUM of more than 6000 crores of AUM and 400+ branches | If ROA are 1.5-2% the Bottom line can be 90-120 crores, IDFC first is targetting 2% can be higher around 3% also can do the math | |
8 | Moat - the different approach they follow is Direct to customer - Talk with HDFC branch manager | ||
9 | Lowest NPA due to new to credit approach | ||
10 | Low attrition rate - 18% | 4 years New team - Normal | |
11 | Opex as a % of AUM is on spree of declining - See SOIC banks Video, operating leverage picks when Branch starts sweating | Equitas Small finance Example | |
12 | Net NPA of 0.3% | ||
13 | Leverage ratio of 4:1 approx will keep the same and keep raising the equity funds for the same | for 6000 crores AUM the Equity will be 1200 crores hence almost same amount of mcap will be diluted | |
14 | Lenders → DCB, AU, Uttkarsh. Tata capital | ||
15 | Highest Loan no. in Moneyboxx Vyapar Loan (Unsecured) | ||
16 | (i) focus on secured products, (ii) steady-state operations and increasing branch vintage, (iii) stable sources of funding, and (iv) rising share of repeat loans with higher loan ticket size. | ||
17 | DTC approach and also Robust underwritting process collection efficiany never went below 95% (95 in covid and normal level is 98%) | ||
18 | Workforce growing 134% | ||
19 | has entered into Co-lending agreement with Vivriti capital, MAS Financial services, Utkarsh small finance bank | ||
20 | Impacted the life of many customers | See AR giving the source of income yielding 70-80k income from per catlle | |
21 | Free VAT services - better underwritting - HDFC bank | ||
22 | Credit ratings - BBB- Icra Positive | ||
23 | Also has ESOP Outstaning | ||
24 | Has Outstanding NIMs of 15% --30% Yield is Normal HDFC branch manager | ||
25 | Profitability to improve once the Opex as a % of AUM goes down | ||
26 | Promoters are taking more than 3 crores p.a. as salary ? Signs of worry | Second level thinking that Associate director/partner and a person handling his own sub 2000 crore funds in US will get almost 200-250k P.a. we can consider that he will atleast take his opportunity cost | |
27 | Payment to auditors | 600000 | 100000 is Audit fess and 500000 is Certification fees |
28 | Couldn’t Find auditor on Likedin | ||
302000 options outstanding | |||
It’s like investing in startup | |||
29 | Life - 2-3 Years in Unsecured and 4-7 years Secured Lending portfolio | ||
30 | Dairy Industry - 60% of Loan, Kirana stores 10%, furniture, eataries 2-3% | ||
31 | Some of the conservative bank as HDFC are also part of Co lending PF | ||
32 | Blended Yield of 30% | << 24% Unsecured and 32% secured | |
33 | Business corospondence with utkarsh << asset light model (cash light model) | ||
34 | 13% secured and remaining unsecured average tenure is 4.5 years | ||
35 | Starting in Gujarat | ||
36 | it takes 6 months for branch to be profitable | ||
37 | 37542 customers and 27-28% are repeat customers | ||
38 | build a book for a third party, like say Utkarsh SFB. So, although all the underwriting methods Moneyboxx apply in line with Utkarsh policy, but the funding is done by Utkarsh. So, say, for example, if we have a yield of 30% on a loan and Utkarsh charges 13%. So, the balance 17% which is the monthly differential interest rate which we get, is the major part of that fee income in this income, which I said the BC business, which we do. The second part is obviously that whenever we do a loan, the loan is priced at 30% which means that 28% is a rate of interest, and say 2%, 2.5% is a processing fee. So, there is that component of processing fees, which is included in the fee income. |
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39 | Cost of credit - Borrow at 11-13% IRR going ahead if credit rating improves cost of credit could go down | ||
40 | Even in spite of rejecting 85% of the leads, we are still able to grow at a very healthy rate. Yes, we have been using proprietary underwriting models, because of the fact that we have now an experience of 4 to 5 years plus 2 years of COVID has really kind of, I know, tested our model and we have kind of tweaked that. So, there is a lot of proprietary information in terms of geographical and geography, the segmentation, the behavior, customer behavior through different credit life cycles that has all got built in into the model and it is getting refiner by the day. So, as we move forward, I think we do have a competitive advantage in terms of understanding the segment better and execution is top notch. |
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41 | Secured loan will be almost 45-50 in 2 years |
Some of my notes on Moneyboxx Business is good, Promoters seem solid with good background, BOD composition is Top notch
Have not invested due to one reason that IMHO credit quality seems to be peaking out, when the things are too good to be true they usually are
I like the business but prevailing environment around industry is very optimistic that makes me a bit fearful
Have Not invested but certainly in my watchlist
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