Indostar Capital Finance IPO seems decent buy; valuation appears reasonable

Experienced management will expand offerings such as vehicle finance and drive growth; valuation appears reasonable

The initial public offering  (IPO) of equity from Indostar Capital Financeh is opening on Wednesday. It comprises a new issue of shares up to Rs 7 billion and an Offer for Sale of up to 20 million shares. Most on the Street find it attractive, on the back of expansion into new loan segments, a strong and experienced management and cheap stock valuation.

The loan book has grown at an annual average of 30 per cent during FY13-17 and stood at Rs 51.7 billion as of end-December 2017. This is more than healthy. The net interest margin (NIM) as a percentage