CreditAccess Grameen Ltd. – Leader in MFI
Established in 1991 as Sanni Collection Private Limited in West Bengal, CA Grameen (CreditAccess Grameen Ltd) commenced its microfinance operations in 1998 as a division under T. Muniswamappa Trust (TMT), a registered public charitable trust/NGO. In 2007, it transformed into a Microfinance Institution (MFI) under the brand name Grameen Koota and subsequently in the year 2016, the company started its retail finance portfolio. In 2018, its name was changed to CreditAccess Grameen Ltd and the company got listed in the same year. Subsequently in 2020, it acquired 76% stake in a Tamil Nadu based MFI – MMFL (Madura Micro Finance Limited). The company’s operations are spread across 14 states and 1 Union Territory with a borrower base of ~4 million. The promoter group, CreditAccess India N.V. held a 73.74% stake in the company as on Q2FY23.
Valuation
CA Grameen’s deep rural penetration and customer-centric business model present it with ample growth opportunities and benefit from the under penetration in the rural markets. Thus, supported by strong customer addition and branch infrastructure strengthening along with existing branches contributing meaningfully to growth, CA Grameen is poised for robust growth. Hence, we recommend a BUY rating in the stock with the target price (TP) of Rs.1145, 3.0x FY24E BV.
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