Capital First - WTF?

20% drop in stock price for no good reason! pheww!

First things first - CAPF does not have any international funding sources aka $ loans; so rupee has no specific impact!

Lets examine promise and delivery -

• Will focus on retail and MSME - retail like Bajaj Finance i.e. consumer durables etc
• Retail contribution in FY10 was 10% and is now 74% (31st March 13)
• Key Qs: has the yield improved? what exactly is retail?
• Retail - 80% is LAP - 13-15% yields, basically MSME loan

• Distribution Network was supposed to increase to 300 outlets by FY13
• Investor presentation says 180 outlets by FY13; aika!
• Key Qs: were there any outlets that were shutdown

• Risk mgmt practices:
• Tough to judge from the outside - barring the conservative writeoff policy

• Loan targets
• 2 x in 2 years; 

Other interesting points:

• Clean board: Vaidi is a marathon runner - significant equity tied up to the company performance
• WP increased stake to 70% - Why should they keep this listed? delist and sell? will definitely be sold one day
• Credit rating up 3 notches at AA+

at P/ABV of 1.0x - it is a no-brainer!