I’m trying to understand the concern around Asirvad, given that it operates as a microfinance company. Setting aside the recent RBI action on pricing, the risks and rewards of the microfinance business are well-known. CreditAccess Grameen, a full-fledged MFI, has commanded strong PE multiples until recently. So, I don’t quite understand why this is being perceived as a drag on valuations.
Manappuram is no longer a single-product company, but it seems the broader market hasn’t fully recognized this shift. Many analysts still categorize it as a single-product company. However, the business now offers a diversified mix, including gold loans, microfinance, commercial vehicle (CV) loans, affordable housing, and MSME lending. Specialized NBFCs operating in each of these segments are trading at much better valuations—typically in the range of 20x-30x trailing PE.
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