The IPO of Indostar Capital Finance Ltd (NSE: INDOSTAR) was subscribed 41 per cent on the first day

of the bidding. The stock is area of interest to many investors, this article is going to brief you about
the company Indostar. What exactly company does, who they are so that you have a clear picture of
it whether you should be investing in it or not.

Incorporated in 2009, INDOSTAR is Mumbai based non-banking finance company (NBFC) registered
with the RBI as a systemically non-deposit taking company which is primarily engaged in providing
structured term financing solutions to corporate and loans to small and medium enterprise
borrowers in India. Recently, they have expanded to offer vehicle finance and housing finance
products through subsidiary IndoStar Home Finance Private Limited.

Looking into the Capitalization of IndoStar, the Net Worth of it was 1,903 Crore as on March 31,
2017. And talking whether this firm performance they were reporting PAT of 211 Crore in FY17. The
Return on Equity for primary shareholders was up to 12.2% in FY17. Since it started operations in
2011, IndoStar’s net profit has grown to over Rs210 crore at a CAGR of 31%. In March 2017, the
company had a loan book of Rs 5,247 crore and a Net NPA of 1.2 %

Talking about the operations of IndoStar, it conducts its retail operations through ten branches
across Mumbai, Delhi, Chennai, Bengaluru, Hyderabad, Jaipur, Surat, Ahmedabad, Pune and Indore
and central support office in Mumbai. The lenders of the company include, among others, 14 public
sector banks, 13 private sector banks, 21 mutual funds and four insurance companies and other
financial institutions. The distribution network includes approximately 210 personnel in its in -house
sales team, and approximately 648 third-party direct sales associates (DSAs) and other third-party
intermediaries.

The company operates four principal lines of business, namely corporate lending, SME lending,
vehicle financing and housing financing.

Corporate lending: INDOSTAR intends to continue to grow its Total Credit Exposure by following the
credit parameters that has yielded its current high asset quality As it grow its presence across India,
it expects to have opportunities to grow Total Credit Exposure in newer locations outside the MMR
as well. It will also continue to carefully evaluate opportunities and monitor Total Credit Exposure in
portfolio from its corporate office in Mumbai.

SME lending: INDOSTAR plan to leverage the potential of existing branches to expand customer
base.

Vehicle finance: INDOSTAR has hi red professionals with significant relevant experience and
increased the number of its branches offering vehicle finance products in order to develop its vehicle
finance business. Its key focus in vehicle finance will be on used commercial vehicles particularly the
vehicles which are in the range of three to five years. It intends s to leverage the relationships of its
team members with small freight operators, medium freight operators and light and medium
commercial vehicle owners to grow its loan portfolio. It also seeks s to increase its customer base
and revenues by strengthening its presence at dealerships and by engaging with dealers of a range
of OEMs.

Housing finance: INDOSTAR’s housing finance business comprises of two business lines, namely

 affordable housing finance, which commenced operations in September 2017, and

 retail housing finance, which commence d operations in March 2018.

It also intends to leverage its relationships with real estate developer customers to develop its
housing finance business line, by either gaining access to purchasers of housing property and/or by
becoming a preferred financier for such real estate developers. As part of affordable housing
finance, its focus will be on providing loans to self - employed individuals in metro cities and other
urban markets.

INDOSTAR has financial services veteran R Sridhar its Executive Vice Chairman and CEO. Sridhar, who
has over three decades of experience in financial services, oversee IndoStar’s growth across its
lending businesses, including Corporate lending, SME lending and a 100% - owned housing finance
subsidiary, IndoStar Home Finance Pvt. Ltd and other asset financing businesses. Sridhar, who has
worked with the Sriram Group since 1985, Sridhar, was the Managing Director & CEO of
Shriram Transport Finance Company Limited, Mumbai, (STFC) since 2000. Under his leadership, STFC
became India’s largest asset financing NBFC with assets under management growing from Rs 5,000
crore to over Rs 40,000 crore. Sridhar has served as the Chairman of the Finance Industry
Development Council (FIDC), a self - regulatory organization for NBFC - AFCs. He has also won
numerous awards including the EY “Entrepreneur of the year – Manager” Award in 2011

INDOSTAR plans to selectively expand its business operations, including sourcing and sale of its
products, into regions where it expect s increasing urbanization, commercial activity and household
incomes to result in demand for its various loan products. It currently expect s that a significant
portion of its geographic expansion will include tier I, tier II and tier III cities in the northern,
southern and western regions of India. It intend s to grow its branches in fifteen key states across
India and currently expect to have approximately 130 branches by June 2018 out of which
approximately 100 will be focused on vehicle finance business and remaining 30 for SME lending and
housing finance business. It also plans to utilize the hub - and - spoke model as part of its expansion
plans in an effort to leverage common infrastructure and optimize operational efficiency.

Recent Updates:

 The Authorised Share Capital of the Company is INR 110 Crore in recent EGM,
 Appointment of Mr Dinesh Kumar Mehrotra, Hemant Kaul and Ms. Naina Krishna Murthy
as an independent director of the company.

Conclusion: INDOSTAR as a NBFC and lending company has a bright future ahead and surely is a
stock to bet on for a long term investment.

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