Industry profile: India has a diversified financial sector undergoing rapid expansion in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds, and other smaller financial entities. In addition, the banking regulator has allowed new entities such as payments banks to be created recently, thereby adding to the types of entities operating in the sector. However, the financial sector in India is predominantly a banking sector, with commercial banks accounting for more than 64 percent of the total assets held by the financial system. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small, and Medium Enterprises (MSMEs). These measures include launching the Credit Guarantee Fund Scheme for Micro and Small Enterprises, issuing banks’ collateral requirements guidelines, and setting up a Micro Units Development and Refinance Agency (MUDRA). With a combined push by both government and private sector, India is undoubtedly one of the world’s most vibrant capital markets.
Driven by strong participation from retail investors and the creation of awareness by the Securities and Exchange Board of India (SEBI), equity mutual funds driven by strong participation from retail investors, and the result of awareness by Securities and Exchange Board of India (SEBI), equity mutual funds witnessed large inflows. Cash flow was kept in the banking system before 2017. The revenues of the brokerage industry in India are estimated to grow by 15-20 percent to reach Rs 18,000-19,000 crore (US$ 2.80-2.96 billion) in FY2017-18, backed by healthy volumes and a rise in the share of the cash segment.
The Indian life insurance industry has begun to recover and is likely to report 12-15 percent growth in FY 2016-17.
In 2016, 2.4 million new Demat accounts were opened by Indians, the highest number of account openings since 2008, led by a higher number of initial public offerings (IPOs) and greater interest in mutual fund investments. SBI, the second-largest issuer of credit cards in India, has reported the issuance of 115,000 new cards in December 2016, post demonetization, taking its total card issuance to 4.75 million.
Company profile: The company is a financial service arm of the Mahindra group. The company started in 1991 as maxi motors financial services. The company enjoys the leadership of parent in Tractor Manufacturer and leader in tractor financing; the company has more than 1000 branches and serves 4.7 million customers. The company offers Vehicle Financing, Construction equipment finance, Pre-owned Vehicle financing, SME financing for working capital and Equipment, Housing finance, Insurance, and Mutual funds. With RBI, the company is registered as an Asset finance Deposit-taking NBFC.
Shareholding pattern: BSE Data
Financials and ratios : [table id=155 /]
Future Prospects: The parent is a leader in tractor financing. So that is a great business opportunity. The mutual fund segment is crowded. There are many good competitors. Even Money market mutual funds also have good competition from Reliance Money managers and reliance treasury. But Rural housing is a segment that can have a great future. As RBI now permits prominent NBFCs to cooperate with the bank, I think it will be an ample opportunity.
