Manappuram General Lease & Finance (MGF), India’s largest gold-lending NBFC, has seen its loan book (Rs12.5bn) post 260% CAGR over FY06-FY09.
Opportunity size of Rs2,000 billion gives enough room for growth. MGF’s single product strategy of lending against household jewellery is an opportunity to participate in the untapped potential of micro finance space in India.
With 30% sustainable RoE, 60% book growth, and 31% CAR, we think MGF deserves premium valuation. We maintain a BUY recommendation.
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