{"id":316,"date":"2019-10-01T09:53:22","date_gmt":"2019-10-01T09:53:22","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=316"},"modified":"2019-10-03T10:37:14","modified_gmt":"2019-10-03T10:37:14","slug":"au-small-finance-bank-aubank-no-liquidity-issues-with-the-banks-or-the-large-nbfcs","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2019\/10\/01\/au-small-finance-bank-aubank-no-liquidity-issues-with-the-banks-or-the-large-nbfcs\/","title":{"rendered":"AU Small Finance Bank (AUBANK): No liquidity issues with the banks or the large NBFCs"},"content":{"rendered":"\n<p><strong>Update on the Indian Market:<\/strong><\/p>\n\n\n\n<p>On Monday, NIFTY closed 0.3% lower at 11,477 points. NIFTY reported September 2019 gains of over 4%. Amongst the NIFTY 50 Stocks, BHARTIARTL (+6.9%), HCLTECH (+3.6%) and UPL (+3.3%) were the top gainers while YESBANK (-14.4%), INDUSINDBK (-6.1%) with other banks dragged the NIFTY down. In the sector-wise performances, IT (+1.9%) and FMCG (+0.3%)&nbsp;were the only gainers while PSU Banks (-3.5%), Private Banks (-2.7%), Financial Services (-2.1%), Media (-2.1%) and Pharma (1.9%) were losers for the day.<\/p>\n\n\n\n<p><strong>AU Small Finance Bank (AUBANK): No liquidity issues with the banks or the large NBFCs<\/strong><\/p>\n\n\n\n<p><span style=\"text-decoration: underline;\">Key takeaways from the interview of Mr Sanjay Agarwal, MD &amp; CEO, AU Small Finance Bank; dated 26<\/span><sup><span style=\"text-decoration: underline;\">th<\/span><\/sup><span style=\"text-decoration: underline;\">\u00a0September 2019 on CNBC TV 18:<\/span><\/p>\n\n\n\n<ul><li>In the meeting with the Smt. Nirmala Sitharaman, Minister of Finance and Minister of Corporate Affairs, India; Mr Agarwal mentioned that the representatives of the banking fraternity accepted that there are no liquidity issues with the banks or the large NBFCs.<\/li><li>AUBANK operates in around 150 districts and 10,000 villages. There are no liquidity crises in any of the areas where AUBANK operates.<\/li><li>In 1QFY20, AUBANK reported 44% in growth in Assets Under Management (AUM) and 40% in disbursements v\/s RBI financial sector growth rate of ~10%. The deposits increased by 100% YoY.<\/li><li>AUBANK has been able to deliver the target they had set. Personal vehicle sales have suffered. The commercial vehicle segment is cyclical and will turn around in due time.<\/li><li>AUBANK already has a business strategy in line with the Finance minister\u2019s advice of increasing the presence in the field.<\/li><li>Mr Agarwal mentioned that the money is available for customers who meet the requirements of eligibility of credibility.<\/li><li>Recent tax reforms from 35% to 25% will lead to growth in the margins.\u00a0\u00a0AUBANK is yet to decide on how it is going to utilize the benefit arising from these reforms; whether for Capex or for improving the Return on Assets (ROA).<\/li><li>AUBANK has a small presence in the gold loans segment but is growing at ~80% YoY. Consumer durable loans too, form a very small part of the advances and is expected to grow at ~80-90% YoY.<\/li><\/ul>\n\n\n\n<p>Consensus Estimate (Source: market screener website)<\/p>\n\n\n\n<ul><li>The closing price of AUBANK was \u20b9 661\/- as of 30-September-19. It traded at 4.7x\/3.9x \/3.2x the consensus book value for FY20E\/ FY21E\/ FY22E of \u20b9 140\/168\/206 respectively.<\/li><li>Consensus target price of \u20b9 699\/- implies a PE multiple of 3.4x on the FY22E book value of \u20b9 206\/-<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Update on the Indian Market: On Monday, NIFTY closed 0.3% lower at 11,477 points. NIFTY reported September 2019 gains of over 4%. Amongst the NIFTY 50 Stocks, BHARTIARTL (+6.9%), HCLTECH (+3.6%) and UPL (+3.3%) were the top gainers while YESBANK (-14.4%), INDUSINDBK (-6.1%) with other banks dragged the NIFTY down. In the sector-wise performances, IT [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[33,4],"tags":[34,36,39,38,35,37],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/316"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=316"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/316\/revisions"}],"predecessor-version":[{"id":317,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/316\/revisions\/317"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=316"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=316"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=316"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}