I am reading about this business and trying to answer the question – Why is the stock price under tremendous pressure? Few things that caught immediate attention were:
- Lack of growth in Housing Finance portfolio: Merged GRUH, which had a portfolio of ~₹181 bn, in Dec19. GRUH as an independent company used to grow at ~20% CAGR, implying an expected loan book of ~₹375 bn by Dec23. However, overall Housing Asset as on Dec23 is ~₹284 bn. In the last 4 years, two heads for ‘Housing Finance’ have moved out.
- Uncertainty due to the ongoing forensic audit initiated by National Credit Guarantee Trustee Company Ltd. (NCGTC).
- Higher unsecured book | Geographical concentration | Loan book concentration: These 3 are being mitigated slowly by the management. However, they seem to be progressing slowly.
@manhar : Would appreciate your latest view since you would have reflected on this business for more than a year now.
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