India Financials

Saumya Agarwal

Equity Bottom-Up

Bandhan Bank, the market leader in micro-finance, has had a very tough FY21 combating the twin frenzy of the Covid pandemic and the elections in the key states of West Bengal and Assam. Both these external shocks have severely disrupted the cashflows of its micro-credit borrowers and severely impacted Bandhan Bank’s asset quality. With the elections now over, it remains to be seen how soon the Covid pandemic abates in India. This will be very crucial for micro-borrowers and for Bandhan Bank to see normalization in collection trends. On its part, Bandhan is diversifying away from the states of West Bengal and Assam and also seeing some incremental improvement in the overdue ( less than 90dpd) buckets .

Bandhan Bank, the market leader in micro-finance, has had a very tough FY21 combating the twin frenzy of the Covid pandemic and the elections in the key states of West Bengal and Assam. Both these external shocks have severely disrupted the cashflows of its micro-credit borrowers and severely impacted Bandhan Bank’s asset quality. With the elections now over, it remains to be seen how soon the Covid pandemic abates in India. This will be very crucial for micro-borrowers and for Bandhan Bank to see normalization in collection trends. On its part, Bandhan is diversifying away from the states of West Bengal and Assam and also seeing some incremental improvement in the overdue ( less than 90dpd) buckets .

Bandhan Bank – Twin Shocks (Covid + Elections) Bring Asset Quality Pain to the Fore

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand's induced moratorium. We have covered various aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/ngern-tid-lor-pre-ipo-pre-covid-growth-track-record-has-been-very-strong" target="_blank" rel="noopener">Ngern Tid Lor Pre-IPO - Pre-COVID growth track record has been very strong</a>. In this note we’ll undertake a peer comparison.

Ngern Tid Lor (NTL), a financial service provider based in Thailand, aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly owned by Bank of Ayudhya and CVC Capital Partners. As per Oliver Wyman’s estimates, NTL had a 16% market share in the vehicle lending market in Thailand, as of 2019. NTL provides hire purchase loans for motorcycles and cars, along with new and used trucks. It also provides insurance brokerage services through its branches for non-life and life insurance. It offers motor insurance, compulsory motor insurance, personal accident insurance, cancer insurance, and loan insurance. As of Dec 2020, it had over 730,000 accounts with total outstanding loans of THB51.3bn. In 2020, it generated non-life insurance premium sales of THB4bn. Over 2016-20, NTL’s gross loans grew at 25.1% CAGR, averaging 25%+ per annum over 2017-19 before slowing down to 7% YoY growth in 2020. Its total income has grown at 22.5% CAGR, while PAT did better with a CAGR of 29.1% over 2016-20. Although, asset quality has taken a hit owing to COVID-19 and Bank of Thailand's induced moratorium. We have covered various aspects of the deal in our earlier note, Ngern Tid Lor Pre-IPO - Pre-COVID growth track record has been very strong. In this note we’ll undertake a peer comparison.

Ngern Tid Lor Pre-IPO - Peer Comparison - Playing Catch up After Being Left Behind

Bandhan Bank, the largest player in the micro-finance space released its Q4FY21 Business update. What makes this doubly interesting is that Bandhan is the largest player in the Indian micro-finance space and also the market leader in Assam and West Bengal - the 2 states which are currently at the center of the election frenzy. Initial trends point to solid loan growth and improved collections, despite the election overhang in these key states

Bandhan Bank, the largest player in the micro-finance space released its Q4FY21 Business update. What makes this doubly interesting is that Bandhan is the largest player in the Indian micro-finance space and also the market leader in Assam and West Bengal - the 2 states which are currently at the center of the election frenzy. Initial trends point to solid loan growth and improved collections, despite the election overhang in these key states 

Bandhan Bank Q4FY21 Business Update – All Eyes on Bandhan Bank

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Building on our previous insight <a href="https://www.smartkarma.com/insights/bandhan-bank-bandhan-in-on-ground-narrative-from-assam-and-west-bengal" target="_blank" data-smartkarma-citation="insights:47495" rel="noopener">Bandhan Bank (BANDHAN IN) | On Ground Narrative from Assam and West Bengal</a>, we again speak to 20 DSC (Door Step Center) managers of <a href="https://www.smartkarma.com/entities/bandhan-bank-ltd" target="_blank" data-smartkarma-citation="entities:26705:1" rel="noopener">Bandhan Bank (BANDHAN IN)</a> across Assam and West Bengal (both together are 60% of the EEB portfolio) with an objective to understand the current situation post-Q4 and the recently concluded state elections.

Building on our previous insight Bandhan Bank (BANDHAN IN) | On Ground Narrative from Assam and West Bengal, we again speak to 20 DSC (Door Step Center) managers of Bandhan Bank (BANDHAN IN) across Assam and West Bengal (both together are 60% of the EEB portfolio) with an objective to understand the current situation post-Q4 and the recently concluded state elections. 

Bandhan Bank (BANDHAN IN) | Pain in Assam Likely to Continue

Thematic (Sector/Industry)

Indian Banks have built up huge ammunition of Covid related and contingent provisions even as the ‘Real’ NPA picture remains somewhat obscure due to multiple factors playing out such as Moratorium, the Supreme Court interim order and the Restructuring framework. How well placed are Indian Banks to ride the current stress cycle?

Indian Banks have built up huge ammunition of Covid related and contingent provisions even as the ‘Real’ NPA picture remains somewhat obscure due to multiple factors playing out such as Moratorium, the Supreme Court interim order and the Restructuring framework. How well placed are Indian Banks to ride the current stress cycle?

Indian Banks: How Well-Placed Are Indian Banks to Ride the Current Stress Cycle?

India

Bandhan Bank Limited operates as a commercial bank. The Bank provides accounts checking, savings deposits, money market, mortgage, and term loans services, as well as card facilities and Internet banking services. Bandhan Bank serves customers in India.

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Bandhan Bank Ltd (BANDHAN IN)

Bandhan Bank – Twin Shocks (Covid + Elections) Bring Asset Quality Pain to the Fore

Bandhan Bank has had to combat the twin shocks of Covid pandemic and the Elections in its key states. With the elections now over, abating of the...

Saumya Agarwal

Ngern Tid Lor Pre-IPO - Peer Comparison - Playing Catch up After Being Left Behind

Ngern Tid Lor aims to raise around US$1bn via selling a mix of primary and secondary shares in its Thailand IPO. Prior to listing, it was jointly...

Sumeet Singh

Bandhan Bank Q4FY21 Business Update – All Eyes on Bandhan Bank

Bandhan Bank, the market leader in micro-finance, is showing encouraging signs in growth and collections, despite the election overhang in Assam...

Saumya Agarwal

Bandhan Bank (BANDHAN IN) | Pain in Assam Likely to Continue

We again speak to managers of 20 DSC (Door Step Center) managers of Bandhan Bank (BANDHAN IN) across Assam and West Bengal with an objective to...

Pranav Bhavsar

Indian Banks: How Well-Placed Are Indian Banks to Ride the Current Stress Cycle?

Indian Banks have built up huge ammunition of Covid related and contingent provisions even as the ‘Real’ NPA picture remains somewhat obscure . Can...

Saumya Agarwal

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