Smallest ever smallcap with a legit business!
A listed dividend paying NBFC with steady growth and a focused plan for expansion
It's essential to highlight that the thoughts and perspectives shared in this particular post do not reflect institutional thinking. Instead, they are a representation of risks that we, as individuals, are personally willing to undertake. It's noteworthy to mention that this particular idea represents one of the least extensive 'scuttlebutt' or ground-level research processes we have ever undertaken before making an investment decision. That being said, given that the company in question is located within our geographical vicinity, we were able to tap into our existing networks and conduct the necessary basic diligence.
Basics of the Company
Market Cap of Less than $5 Million
Non-Banking Financial Institution with a Geographic & Real Estate Focus
Small Loan Portfolio with Steady Growth
Acquired by Existing Promoters a few years ago
Profitable with Consistent Dividend Payments (Small Dividends though!)
The Good
Promoters with a Good Reputation
Steady Growth Reflecting Strong Foundation and Processes
Potential for Rapid Expansion
Efficient & Frugal Operations with a Lean Team
Potential Duality in Valuation: Meteoric Ascent or Write-off
Zero Non-Performing Assets (NPAs) thus far
Promoters' Commitment Evidenced by their Modest Remuneration
Geographic Focus Enhancing Market Insights
The Bad
Elevated Borrowing Costs at present Due leading to elevated lending rates which may lead to substandard loans, lower margins and delinquencies
Highly Competitive Landscape in the Geographic Region
Concentration Risk in Geographic and Sector Exposure
Liquidity Risk Due to Low Market Capitalization
Venturing into the Unknown: Why This Investment?
A Calculated Risk within the Portfolio
Promoter Group's Impressive Reputation showing in initial actions (dividend paying, low remuneration, frugal )
Ancestral Success in Building Large Businesses
Steadfast and Focused Growth Approach
Attractive Entry Valuation and Market Capitalization
Thriving Geographic Region as a Growth Catalyst
In the spirit of full transparency, it's important for readers to know that we have financial interests and hold positions in all the companies that we discuss and write about. Our intention is to provide accurate and unbiased information, but our affiliations should be acknowledged to ensure there's no perceived conflict of interest.
We want to emphasize that this communication should not be misconstrued as a recommendation, as we are not SEBI RIAs. It is crucial for readers to conduct their own due diligence and exercise caution. Therefore, we urge all readers to approach this opportunity with prudence and carefully consider the potential risks involved. While the prospects appear promising, it is essential to maintain a cautious approach and stay informed of the inherent dynamics of the industry.
Happy to chat and discuss this in detail
About Us -
Govind Shorewala - Entrepreneur (Mining, Textiles) & Investor (Private & Public Markets) → Reachout at: govind.shorewala@gmail.com
Aaroah Mittal - Early Stage VC → Reach out at: aaroah.m@people-group.com