PE-backed MAS Financial climbs 31% on trading debut

MAS commenced trading on the Bombay Stock Exchange on October 18 at INR601, a significant premium to the offering price of INR459.

The company issued 10 million shares in its IPO, comprising 5.1 million newly issued shares and 4.9 million shares from existing shareholders including German development finance institution DEG, Netherlands Development Finance Company (FMO) and Lok Capital, according to a prospectus. The IPO was 128 times oversubscribed. DEG, FMO and Lok retained 16,000, 11,000 and 517,000 shares respectively.

Prior to the IPO, MAS raised INR1.4 billion from anchor investors including JP Morgan, Nomura and Wasatch Advisors. Credit Suisse also participated in the pre-IPO round, investing INR189 million.

MAS was founded in 1995 as M/S Marketing & Allied Services and originally engaged in consumer financing before registering as an NBFC. The company provides corporate loans to micro, small and medium-sized enterprises (MSMEs), commercial vehicle and two-wheeler loans, and housing loans for individuals and developers.

As of March, MAS had INR33 billion in assets under management, up from INR27 billion the year before. Micro-enterprise loans accounted for the majority of this figure, with INR19.8 billion in 2017 and INR17.3 billion in 2016. Over the same period, revenue from operations grew from INR3 billion to INR3.6 billion, while net profit rose from INR508 million to INR686 million.

FMO invested in the company in 2008, committing $20 million alongside ICICI Venture Fund Management. DEG followed in 2012, investing an undisclosed amount, and Lok bought part of FMO's stake in 2014 through its Sarva Capital vehicle, in which FMO is an investor.

A number of PE-backed Indian NBFCs have gone public in recent years, including PNB Housing Finance, which gained 11.35% on its trading debut last year after raising INR30 billion in its IPO, and Ujjivan Financial Services, which debuted at INR231.9 in May 2016, a 10% premium to its INR210 issue price.

Au Small Finance Bank, earlier known as Au Financiers, was among the most successful NBFC IPOs. Its offering earlier this year was heavily oversubscribed and enabled it to raise more than INR19 billion. Warburg Pincus, ChrysCapital, Kedaara Capital and IFC all made partial exits in the offering. Its most recent closing price was INR591, a 65% premium to the offer price.

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• Topics
• South Asia
• Financials
• IPO
• India
• NBFCs
• Exit
• German Investment and Development (DEG)
• FMO