Stock Name : AU SMALL FINANCE BANK LTD Buy : 1298 Posted Date : Mar 30, 2021
Stopless : 1235 Target : 1485

AU Small Finance Bank Limited is an Indian scheduled commercial bank that was founded as vehicle finance company AU Financiers (India) Ltd in 1996 and converted to a small finance bank on 19 April 2017.AU Small Finance Bank has a long-standing track record of over two decades of being a retail-focused and customer-centric institution; serving low and middle income individuals and micro / small businesses that have limited or no access to formal banking and finance channels. The Bank offers a comprehensive suite of loan, deposit & payment products and services.

AU Small Finance Bank ranked 355 in the list of Fortune India 500 (2019) companies, with annual revenue of ₹3,410.87 crore (US$478 million) and Total B/S Assets of ₹31,198.68 crore (US$4.4 billion). Its full market capitalization at FY18 was ₹17,655 crores (US$2.71 billion).AU Bank had Gross Asset Under Management of Rs. 21,765 Cr, Total Deposits of Rs. 14,686 Cr, Net Worth of Rs. 3,035 Cr and Gross NPA and Net NPA of 2.1% and 1.3% respectively as of December 31, 2018.The Bank is adequately capitalized with Total CRAR of 19.0% and Tier-I CRAR of 15.5%. AU Bank enjoys long term credit rating of “AA-/Stable” from CRISIL Ratings, ICRA Ratings. India Ratings & CARE Ratings. The company was founded by Sanjay Agarwal (managing director and CEO of AU Small Finance Bank) as a private limited company, and publicly listed in an IPO on 29 June 2017.A merit holder Chartered Accountant and a first generation entrepreneur, he holds 31% stake in the Bank. He is supported by a team of 12,572 employees.AU Small Finance Bank is listed on NSE & BSE with market capitalization of Rs. 17,000 crore. On its first day of trading, the stock rose 51% to be the most expensive bank in India based on price-to-book.

In November 2017, the Reserve Bank of India added the bank to its schedule of commercial banks, further improving the bank’s growth prospects by reducing the cost of short-term funds and improving the bank’s ability to provide services. Over the years, the Bank has attracted marquee investors like IFC, Warburg Pincus, Temasek Holdings, Nomura, SBI MF, Kotak Mahindra MF, etc. Private equity companies that provided venture capital, including Warburg Pincus and International Finance Corporation, made partial exits for as much as nine times their original investment. May 2020 – Bharti (SBM) Holdings Pvt. Ltd, a firm owned by Sunil Mittal family has acquired 0.79 % for a consideration of INR100 crores.

Due to its history as a vehicle finance company, as of March 2018 almost all the loans made by AU Small Finance Bank were secured, unlike most small finance banks that have unsecured loans due to their background in microfinance. This provides lower yields (lower interest rates) than unsecured loans, so the bank has been particularly active in growing its deposits, as bank deposits have lower cost than other sources of funds.It has also sought to diversify into savings products like deposits, payment / transaction banking, distribution of third party products, and additional loan products thereby positioning itself as a holistic financial products and services provider.

As on December 31, 2018, AU Small Finance Bank’s distribution network comprises 396 branches, 84 asset centers, 49 business correspondents, 15 offices, 485 ATMs and 625 touchpoints spread contiguously across 11 states in North, West & Central India with over 1.1 million customers. The bank has operations in 11 states and one union territory, with Rajasthan, Gujarat, Maharashtra and Madhya Pradesh being key states. It is one of the largest banks by number of locations in its home state of Rajasthan.
AU Small Finance Bank ranked 479 in the list of Fortune India 500 (2018) companies, with annual revenue of ₹ 2,155.25 crores (US$ million) and Total B/S Assets of Rs. 27,812 Cr (US$4.038 billion).Its full market capitalization at FY18 was ₹17,655 crores (US$2.71 billion).The AUBANK INE949L01017 was listed on Nse on 10-Jul-2017.

Price Performance of the stocks
1 Week 4.30%
1 Month 12.80%
3 Months 52.37%
YTD 52.35%
1 Year 162.03%
3 Years 110.16%

BROKER RESEARCH
10 Mar, 2021
Sharekhan
BUY
Reco Price 1255.15
Target Price 1500

Stock holdings pattern
PROMOTER 28.98
FII 32.78
DII 18.93
PUBLIC 19.31

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