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 as and a result of understanding by the Securities and Exchange Board of India (SEBI), equity mutual funds witnessed large inflows which were kept in the banking system before 2017. As a result, 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: Sundaram Finance Limited and its subsidiaries provide various financial products and services in India. The company accepts fixed deposits, cumulative deposits, and non-resident Indian deposits. Its loan products include car loans; home and mortgage loans; finance for the acquisition of new and used commercial vehicles; finance for construction equipment, such as excavators, loaders, dumpers, tippers, compactors, compressors, etc.; farm equipment, including tractors, combined harvesters, and other farm implements; diesel finance; tire finance; and asset-based financing solutions. The company also offers debit and equity products, as well as portfolio management services; and motor, health, personal accident, home, travel, fire, marine, engineering, liability, and business interruption risks to individuals, families, and businesses directly, as well as through its intermediaries and affinity partners. In addition, it provides enterprise resource management solutions to mid-sized companies through Microsoft Dynamics. It develops ERP solutions in manufacturing, retail and distribution, trading and logistics, automotive, new seed, financial services, and business outsourcing services.
Further, the company offers securities services, including fund accounting and transfer agency services. It operates through a network of 622 branches. Its subsidiaries include Sundaram Asset Management Company Limited, Sundaram Trustee Company Limited, Sundaram Business Services Limited, Sundaram Insurance Broking Services Limited, and Sundaram Finance Distribution Limited, among others.
Shareholding Pattern: BSE Filing
Financials and ratios : [table id=202 /]
Future Prospects: India’s financial sector is growing by leaps and bounds, and a company like Sundaram is very much placed to get the opportunity. The company holds some significant assets like mutual funds. Though I can’t find substantial analysts coving company, few views are available ( If I am missing, then sorry.) But I believe this company will give good returns by keeping its growth rate of earning. I think that when The company is financing vehicles and having TVs as a group company, there aren’t many issues about growth.
