Today’s Stock : Tourism Finance Corporation of India Limited

By | 10th February 2018

Tourism Finance Corporation of India Limited

Current Market Price 163.30 as on 09-02-2018

Target Price 225/400

Helping Tourism Grow

 

Rationale

§  Great Performance –

The Company has achieved Net Profit of Rs.23.42 crores for the quarter ended December 31, 2017 against Rs.16.70 crore for the quarter ended December 31. 2016. EPS of Rs.8 for 9M Dec2017

§  Erstwhile Government owned Financial Institutional promoters divest their stake and new large shareholders comein
During September 2017, IFCI sold 24% of its stake through a series of bulk deals to, Sanjeev Thomas and others***. Sanjeev Thomas has 30 years of banking experience with stints in Shinsei Bank and Citigroup. Redkite Capital is a New Delhi-based wholesale lending NBFC. It was incorporated in 2010 and main promoters are Ashok Gupta (MD), Naresh Tikamchand Jain and Om Prakash Khandelwal. Its activities include hirepurchase financing, financing NBFCs financing hirepurchase of consumer durable goods like vehicles / TV etc.
§  Change in Board of Directors
It is just a matter of time in which the Government nominee directors are withdrawn/changed. The 6 independent directors on the board are also likely to be reviewed. The new shareholders will either have to buyout LICs stake or get their go-ahead to the new structure. Ministry of Tourism also needs to withdraw or stay out with minimum prescriptions about the way the company will be operated. The Board of Directors of TFCI appointed Mr. Bapi Munshi as an additional director in independent capacity from February 1, 2018 for 5 years. Mr. Bapi Munshi served as President of Axis Bank Limited since November 2008 and served as its Chief Risk Officer and as the President of Treasury at Axis Bank Limited. Mr. Munshi has a Postgraduate Degree in Science from IIT, Kharagpur and is a certified Junior Associate of Indian Institute of Banking.
 
§DENOFWEALTH  IS  CONFIDENT  THAT  OWNERSHIP  OF  TFCI  WILL  ULTIMATELY  GO  TO  SSG  CAPITAL,
SINGAPORE (USD 2 billion fund mainly focused on India). CURRENT MANPOWER OF TFCI IS JUST 30 EMPLOYEES. ONCE OPEN OFFER TAKES PLACE AND NEW MANAGEMENT TAKES CHARGE, BUSINESS SCOPE OF TFCI WILL BE VASTLY EXPANDED BY DIVERSIFYING LENDING IN VARIOUS OTHER SEGMENTS AND REINFORCE MANPOWER. TFCI CURRENTLY HAS BORROWING OF ONLY 1000 CR WHEREAS ITS CURRENT NETWORTH ITSELF CAN ENABLE TFCI TO HAVE BORROWING OF 3500 CRORES. Moreover, CURRENTLY,  TFCI  DON’T  TAKE  EXPOSURE  OF  MORE  THAN  50  CR  IN  A  SINGLE  A/C  WHEREAS  NEW MGTMNT WILL DFNTLY ADOPT TO GO FOR BIGGER LENDINGS AS WELL. TFCI CAN WITNESS STEEP GROWTH IN ITS BIZ FROM Q3 FY19 ONWARDS.

§  Organizational transformation could result in re-rating

With identifiable and seasoned investors coming in as its promoters, we think TFCI can change its growth gears and may be on the way to rerating as the company undergoes organizational transformation records higher growth in  AUM  (given  the more  than comfortable capital adequacy – 39% as of March 2017 vs regulatory requirement of 15%), possible rise in NIMs due to shifting towards higher-yielding assets. This could also result in improvement in RoA and RoE. Although the new promoters are yet to get nominated as directors, they may be able to influence the direction and pace of growth of the company.

 
 

 

§ Advisory Services:

 

Since its inception, TFCI provides highquality research and Consultancy services to the tourism industry in general and to the investors in the tourism industry in particular. In line with this, TFCI has been providing Consultancy services to different central and state agencies by undertaking broad-based assignments to cover macro  micro level tourism-related studies/exercises to facilitate identification, conceptualization, promotion/implementation of specific tourism-related projects & for taking policy level decisions with respect to investment and infrastructure augmentation etc.
Besides, TFCI has been providing specific projectrelated services to various private sector clients. It has also undertaken appraisal of individual projects for various state government agencies / individual clients. TFCI has also successfully handled projects involving development of viable project concepts around lakes / water bodies, development of a multi-facility amusement park complex etc.

 

TFCIs range of activities in the Consultancy Division encompasses project–related services for Private sector & Institutional Services for Central and State Govts.

 

 
WATCH THIS BLOG’S FULL VIDEO HERE : https://youtu.be/LQJ33SFxkxs
 

 

Our Blog website : https://multibaggerspoint.blogspot.in/

Follow us on Facebook : https://www.facebook.com/multibaggerspoint1

Follow us on YouTube : https://www.youtube.com/multibaggerspoint


Disclaimer:

My descriptions, videos, presentations are only for educational and information purposes and under no circumstances should be used for making investment decisions. I cannot guarantee the accuracy of any information provided.
The stocks picks are based on my own research and personal views and sometimes are from newspapers, tv channel program, magazines, etc. No part of compensation is or will be directly or indirectly related to the views and recommendations of this research. I have not served as an officer director or employee of company and have not been engaged in market – making activity of the company covered in the research report.
Consult qualified financial advisor before making any investment decision.
 

Leave a Reply

Your email address will not be published. Required fields are marked *