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By Gaurav Bora, Market Expert
1. The company incorporated in 1920 based in Kerala, Bank is having legacy of 100 years. This is one of the oldest private sector banks and they have a major presence in Kerala, Tamilnadu, Karnataka, and Maharashtra and having 412 branches across 16 states. Bank is planning to open 425 branches in next 5 years to diver growth.
2. Strong presence in South India (79% of Branches), This is well reflected in stable deposit base and improved renewal rate 98% in 1HFY20, despite reducing rates this fiscal.
3. Focus to remain on Gold loans to drive performance, so we may expect growth like peers Manappuram Finance and Muthoot Finance.
4. Reasonable valuation at the upper price band, the issue is valued at 2.4x Price/Book on 1HFY20 post issue diluted basis.
5. If we compare this issue with recent private banks listing likes Bandhan Bank & AU Bank then it is already well developed bank so we may expect much better performance.
Our View:
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