Buy and Sell Fincare Business Service Unlisted share

Fincare Business Service Unlisted Shares

Content

Fincare Business Service Essentials

ISIN

INE957R01025

Face Value

₹1.00

Total Share

32,84,17,440

Total Income

₹599.60 Cr

Profit After Tax

-₹29.20 Cr

EPS

-₹0.73

P/E

-98.63

P/B

2.53

Market Capitalisation

₹2,364.61 Cr

Enterprise Value

₹5,801.01 Cr

Book Value

₹28.45

Intrinsic Value

₹133.88

Earnings Yield

-1.01 %

Sector

Financials

Sub-sector

Diversified Financials

Fincare Business Service Growth

About Fincare Business Service

Fincare Business Service Limited(FBSL) is a Non-Banking Financial Company-Non Deposit-taking Core Investment Company (NBFC-CIC-ND) registered with the Reserve Bank of India (RBI).
The company's operations and activities are limited to investing in and providing loans to a group company i.e., Fincare Small Finance Bank Limited.
FBSL, operates as a holding company for Fincare Small Finance Bank, which lends to under-penetrated and under-served areas of the company. incare Business Services Private Limited that provides banking and financial services.
The company was incorporated primarily as a private company under the Companies Act,1956, to manage the capital requirement in associate companies and also provide financial management and consultancy services. The Company has converted into a non-deposit accepting Non- Banking Financial Company - Core Investment Company (NBFC - CIC) with effect from 2 February 2017.
The company has its registered office in Bengaluru, Karnataka.

Fincare Business Service IPO Details

As of March'22, the company doesn't have any plan for IPO.

Fincare Business Service Funding

Funded By	Funding Amount	Date of Investment	Fund Name
investors LeapFrog Investments, Kotak Mahindra Life Insurance Company Limited, Edelweiss Tokio Life Insurance Company Limited, SIDBI Venture Capital Limited, TA Associates Management, L.P., Tata Opportunities Fund, L.P.,	₹ 950 M	Aug 2018	Private equity round
-TA Associates Management, L.P., SIDBI Venture Capital Limited, existing investor True North (Managers), Kotak Mahindra Old Mutual Life Insurance Ltd., Edelweiss Tokio Life Insurance Company Limited, and Tata Opportunities Fund, L.P.	₹ 5000 M	Mar 2017	Private Equity Round

Fincare Business Service Merger & Acquisition

Acquisition

On 26 September 2019, the directors of the Company approved the acquisition of Lok Management Services Private Limited ('LOK') by way of a Scheme of Amalgamation. The entity was merged with the company vide RD order dated March 5, 2020.

Fincare Business Service Subsidiaries

As of March'22, the company has one subsidiary i.e. Fincare Small Finance Bank

Fincare Business Service Business Model

The primary purpose is to oversee the capital requirements of affiliated companies and to offer consulting and financial management services. With effect from February 2, 2017, the Company has changed into a Non-Banking Financial Company - Core Investment Company (NBFC - CIC) that does not take deposits. The main operations and activities of the company are to invest in and provide loans to group companies.

Fincare Business Service Revenue Segmentation

Interest Income
Other financial charges

Income on investment
Other Income

Fincare Business Service Product & Services

Invest and provide loans to group companies.

Fincare Business Service Assets

As of 31st March'2021, the company has fixed assets worth 109.4 crores.

Assets	Amount In Rs.(crores)
Right-of-use asset	73.93
Land	0.23
Furniture and Fixtures	8.30
Computers & equipments	6.01
Office Equipment	8.57
Leasehold improvement	11.74
Vehicles	0.64

Fincare Business Service Industry Overview

Industry Statistics

A non-deposit accepting Non-Banking Financial Company ('NBFC-ND') is supposed to be registered as a Non-Banking Financial Company with the Reserve Bank of India (“RBI”) under section 45-IA of the Reserve bank of India Act, 1934. These companies do not accept public deposits but raise debt from the market and banks.
Within the NBFC-ND segment, systemically important(SI) NBFCs are those with an asset size of Rs.500 crore or higher. NBFC-ND-SI controls roughly 86.3% of the entire asset size of the NBFC segment (Rs.30.9 lakh crore), while the government-owned NBFCs hold 36% of the total share as per "RBI Trends and Progress of Banking in India".

The NBFC-ND-SI companies account for about 80% of the NBFC sector's total income, while the income and net profit of NBFC-Deposit companies as a percentage of total assets is higher as compared to NBFC-ND-SI.(it accounts for approximately 23% share in the net profit of NBFCs).
The NBFC-ND-total SI's cost-to-income ratio climbed from 68.3% in FY17 to 81.2% in FY20, showing an increase in operational expenditure. On the other hand, the cost-to-income ratio of NBFC-Ds increased from 80.9% during FY17 to 84.70% during FY20, which resulted in a higher profitability.
In terms of asset quality, NBFCs-D outperformed NBFCs-ND-SI in 2020. In 2020, they showed a little decrease in their GNPA ratio, which was helped by steadily increasing payments. More than 90% of all outstanding debt is held by investment and credit firms and infrastructure finance companies; as a result, non-performing assets in these two categories are increasing the GNPA ratio for the NBFC sector as a whole.

Future Prospects

The company's future growth is directly related to its subsidiary's growth i.e Fincare Small Finance Bank.

India Banking Market is projected to grow at a double-digit CAGR during 2019-2024 owing to rising disposable income, growing digital payment system in the country, growing bank branch networks, athe nd entrance of foreign banks in the Indian market.
According to RBI, bank credit and deposits stood at Rs.106 lakh Cr. and Rs. 146 lakh Cr. respectively, as of January 15, 2021.
India is expected to be the fourth largest private wealth market globally by 2028.
As per CRISIL the share of SFBs in deposits as well as credit has seen a steady rise over the years and is expected to reach 1% and 1.5% respectively by Fiscal 2024 from the current 0.6% and 1.0% in deposits and credits in Fiscal 2021.
According to CRISIL, SFB’s AUM clocked 26% CAGR during fiscals 2016-2021. CRISIL research expects the sector’s loan portfolio to see a strong ~22% CAGR in the near term as most of the SFBs have completed the transition phase and likely to get benefit from the operating leverage.
The share of SFBs in deposits as well as credit has seen a steady rise over the years and is expected to reach 1% and 1.5% respectively by fiscal 2024 from the current 0.6% and 1.0% in deposits and credits in fiscal 2021. This will be on the back of robust growth on account of focused penetration and on the ground reach of these entities in comparison to the other more established player groups.
In terms of branches, the share of SFBs in total branches is lowest in the Eastern and the Central region followed by the Northern region. These areas are still largely dominated by public sector banks. This provides considerable opportunity to SFBs to gain further share through their specialised offerings and expanding their services to the underbanked.

Fincare Business Service Strengths

Fincare Small Finance Bank, a subsidiary of the corporation that has tremendous potential for future growth, receives investments and loans from the company, creating room for the latter's expansion.
The company Introduced a Video KYC (VKYC) option for account opening - this enables the customer to open a completely digital Full KYC account, and increased the business penetration.
It Updated WhatsApp Banking – migrated from a Menu-driven interface to Natural Language Processing based Multi-lingual and conversational BOT, which will increase the customer base for the company.
Introduced tab-based gold loan application – this enables processing of gold loans, disbursement, collections, renewals & closures, all on the tab.
Introduced Virtual debit cards – this enables customers to use a debit card seamlessly in a contactless manner.

Fincare Business Service Shortcomings

Fincare Business Services Limited's major revenue comes from its subsidiary only, which makes it totally dependent on it, any impact on its subsidiary will also impact its business.

Fincare Business Service Opportunities

Fincare Business Services Limited's subsidiary which is the main source of its revenue can have a Diversified distribution network with significant cross-selling opportunities. The total unbanked population in India is 190 million which offers it a huge opportunity to cater to this population.

Fincare Business Service Threats

Rise in interest rates by RBI.
RBI has acknowledged that such CICs rightly rationalize a different treatment in the regulatory recommendation pertinent to Non-Banking Financial Companies that are non-deposit taking and systemically significant.
It is now determined by RBI that only those CICs have an asset size of Rs. 100 crore and above would be treated as systemically significant core investment companies. They would necessitate registration with the Reserve Bank and would be given a discharge from the safeguarding of net owned fund and revelation norms subject to certain circumstances.
Capital necessities: Every CIC shall make sure that at all times it maintains a minimum Capital Ratio whereby its accustomed Net Worth shall not be less than 30% of its cumulative risk subjective assets on the balance sheet and risk accustomed value of off-balance sheet items as the date of the last audited balance sheet as at the end of the financial year.
Leverage Ratio: Every CIC shall make sure that its external liabilities at all times shall not surpass 2.5 times its Adjusted Net Worth as on the date of the last audited balance sheet at the conclusion of the financial year.