Inside Adani Capital IPO Plans: Doubling Loan Book Every Year

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Adani Capital – Adani group’s non-banking finance company (NBFC) – plans to list itself on the domestic bourses through an equity public offer. According to a report by Bloomberg, Adani Capital IPO is likely to raise INR 1,500 crore as early as 2024.

The upcoming IPO is likely to see public sale of nearly 10% shares, valuing the company at nearly INR 15,000 crores. In an interview with the newswire, managing director and chief executive officer Gaurav Gupta revealed the plans to list the lender.

If you are listed then your ability to raise incremental capital is higher

Gupta’s statement is yet another proof of the ongoing reversal in the fortunes of NBFCs with easing NPAs and credit availability.

The company offer loans to farmers and small and medium-sized businesses with a focus on Tier 2 to Tier 4 markets. Adani Capital offers loans ranging from INR1 lakh to INR1 crore in various categories such as

  • Tractor loans – New, used, refinance
  • Commercial Vehicle loans – Small & light commercial vehicles
  • Business Loans – Fully collateralized term loans for business purpose
  • Supply Chain Finance – Short-term working capital facility to small and medium enterprises

The company was registered with RBI and received its NBFC license in January 2017 and commenced operations from March 2017.

As of 31 March 2021, the company’s total asset under management (AUM) stood at INR1,292 crore with over 28,000 customers across 63 branches in 6 states of Maharashtra, Gujarat, Rajasthan, Karnataka, UP and Tamil Nadu.

Although the company is quite modest in terms of size and scale, it is making continuous progress and Gupta aims to double its loan book every year. To this end, the company has already expanded its branch network to 154 and total borrowers to 60,000. This is an important aspect as growth is often rewarded by stock market and it will be no different a case in Adani Capital IPO.

According to the latest annual results available on the company’s website, it posted a sturdy growth of 32.8% in annual revenues to INR254.2 crore for the year ended 31 March 2022. Nevertheless, its profits declined from INR16.3 crore in FY2021 to INR7.2 crore in FY2022 on account of higher finance costs.

Adani Capital IPO to be Keenly Watched

Without a doubt, Adani Capital IPO will be a very interesting development and is warranted to garner strong interest, especially from retail segment. Adani group stocks have been on fire lately in the recent years and several investors have made tremendous gains in these stocks.

On the IPO side of the business, the group has again rewarded investors with the public offer of its FMCG arm Adani Wilmar early this year. While the stock listed with robust gains of over 16%, it picked up momentum in the following days and touched a high of INR841 per share in April 2022, marking a jump of 265.7% from IPO allotment levels.

As such, expectations will be sky high from Adani Capital IPO. Watch this space for more updates. Adani Capital IPO

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