Hello,
I am new to this website and am writing to start a discussion on SBFC Finance.
Started by bankers who have worked across many private sector banks (Kotak, HDFC etc.) the company seems to be tapping into a need in India – Finance to manage cash flows/ start a business. (Ticket size for loans: 7-20Lakhs)
This seems very stable as the loan is to facilitate business cash flows and backed by the lendees home as a collateral.
Moreover, the company has a wide spread distribution network and is currently focussing on sweating the current assets to increase loans/ center. (could possibly lead to increased RoE over the next few years).
In comparison to Five start business, SBFC is targeting slightly higher ticket size of loans. (Possibly more stable and secure target market).
There seems to be a long runway for this company considering that in India : rural, semi-urban areas have self-employed business, self-employed agriculture as a great proportion of the sources of income. Moreover, consistent NPAs (low) are also promising (Loans are backed by the lendees home as collateral; Wife/husband is a co-signee).
My question is regarding the very volatile nature of this stock in the last couple of months. Any ideas as to what are others seeing which we may be missing? Why are bulls and bears having a n intense go at this one?
Thank you
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