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Jun 22, 2017 05:01 PM IST | Source: Moneycontrol.com

Subscribe to AU Small Finance Bank: GEPL Capital

GEPL Capital has come out with its report on AU Small Finance Bank. The research firm has recommended to "Subscribe " the IPO in its research report as on June 22, 2017.

Subscribe to AU Small Finance Bank: GEPL Capital

The company is a customer centric organization and serviced 280,349 active loan accounts as of March 31, 2017. The company has developed strong relationships with its customers through in-person contact by addressing their financial needs, its knowledge of the local markets and its widespread network of branches. They hire local personnel as their personal contact with customers in rural and semi urban markets encourages repeat business, leads to business referrals and results in high collection efficiency. The company also establishes relationships with vehicle manufacturers and dealers. The company has set up call centers which operate in English and select regional languages. They have separate tele-calling teams for their vehicle finance and MSME loans business, which enables them to have a more focused approach towards their customers. The company has introduced customer retention programs such as ‘Dost Banaye Dost Programme’, which is a referral program for customers.

Valuation

AU Small Finance Bank Ltd. stands to gain from operating leverage. At a P/B of 5.09xs of FY17 BV. We believe that AU Small Finance Bank Ltd. demands a discount to its domestic peers. We assign a Subscribe rating to the IPO.

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