Company Profile -
Capri Global Capital Limited (CGCL) was set up in 1997. It is a Non-Banking Finance Company (NBFC) registered with Reserve Bank of India (RBI) as ND-SI (Non-Deposit taking systemically important) and is listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Until 2011, CGCL offered an entire bouquet of financial solutions and services with emphasis on debt advisory services and has executed transactions close to INR 50,000 crores during FY2009 to FY2011. In October 2010, we successfully completed a Qualified Institutional Placement (QIP) and raised INR 445 crores taking a foray into Asset Financing and the Lending business in FY2012, thus leveraging on its extensive domain knowledge and understanding.
We take pride in recognizing the fact that in a short period of time we have made significant disbursements fuelling the economy and help build enterprises. With a firm hold in the Wholesale Lending space, CGCL has now forayed into lending to Micro, Small and Medium Enterprises (MSME). Our focus continues to be on generating supreme quality asset book spread across multiple locations where MSME clusters exist. Our present product range includes - loans for Purchase of Equipment and Machinery, Working Capital loans, loans for Business or Capacity expansion, Term Loans against Property, loans for Purchase of Commercial Property, and Lease Rental Discounting.
Uneven Background -
It is erstwhile MoneyMatters for those who remember 2010 Housing Finance Scandal. The CEO was arrested by CBI for alleged bribing of PSU bank executives(same story as Bhushan Steel). Would like to caution that the earlier promoter Rajesh Sharma and associates still own about 25% of the shares.
But story seems to have changed now and looks like a turn around story, Capri Global partners, a US based real estate investment group has taken the control of the company and now owns about 50% of the shares. Its chairman Quintin E Primo III is now Non Executive chairman of the Capri Global Capital India and is very serious about leveraging the expertise of Capri Capital to grow Capri Global India. And has been a successful international investor.
Quintin E Primo III a 1st generation entrepreneur is a Harvard MBA, built Capri Capital with a few others Harvard /Kellog/Wharton MBAs. Their background looks very solid.
Primo had a humble beginning and has grown Capri brick by brick. From what I have read and watched about him so far, have been impressed and he sounds like a very ethical person.
Current Business -
Capri Global India is, its networth is about Rs 970 crores and no loan.
They have 3 verticals of lending , SME lending(Rs 280 crores) , Wholesale Lending (Rs 505 crores)and now they are planning to finance affordable housing.
Whole sale lending consists mainly Residential real estate.
Their CAR is 94% compared to 15% of the regulatory norm hence they could borrow multiple times their current loan book, so huge potential. Technically they could stretch their loan book by another Rs 6000 crores. They have aggressive plans of expansion in tier two/three cities in next 2 years.
Our View -
Company is currently trading at PE of 7 and 0.6 of its book value price where many other company trading at their book value of 2-3 in lending finance business, this looks a dirt cheap stock. Further, promoters are buying from open market every year to the max. permissible limit of 5% which is also a boosting factor for me. A successful international chairman with lots of potential would be an additional gem into the basket. Considering all this factor, we can not rule out capri global to trade at 280-300 level in coming quarters. Hence, at CMP of 173 we recommend a buy for the target of 280.
