Established in 1994 by Rajendra Kumar Setia, the company is a non-deposit-taking non-banking finance company (NBFC) operating in two primary verticals: vehicle financing and financing for Micro, Small and Medium Enterprises (MSMEs). Recognised as the fastest-growing player in these sectors by the CRISIL, it has demonstrated significant growth in assets under management (AUM), particularly between Fiscal 2021 and Fiscal 2023.
The company's vehicle financing vertical primarily focuses on secured, granular retail loans for used and new commercial vehicles (excluding medium and heavy commercial vehicles), cars, tractors, and new two-wheelers. As of December 2023, it was noted for having the highest used vehicle finance share among its peers.
In the MSME sector, it began lending in late 2016, targeting businesses primarily for their working capital needs. These loans are fully backed by assets and are mainly directed towards income generation for customers who are often self-employed, unbanked, predominantly in rural and semi-urban areas of India.
The company's extensive distribution network has enabled it to provide last-mile financial support in rural regions, which are significantly underserved by traditional banking channels. As of December 31, 2023, the company operated through 535 branches across 11 states and one union territory, employing over 10,725 individuals.
Industry Outlook:
- The vehicle finance segment in India is projected to grow significantly, with an estimated increase from ₹11.85 trillion in Fiscal 2023 to approximately ₹21 trillion by Fiscal 2027, driven by a CAGR of 16-18%. This growth is supported by the recovery in demand and easing semiconductor shortages, particularly in the passenger vehicle sector.
- NBFCs are anticipated to continue dominating the vehicle finance market, maintaining a significant share of 39.97% in Fiscal 2023, with expected growth at a CAGR of approximately 17% from Fiscal 2023-2026. This is bolstered by their ability to cater to a wide range of customers, including those in underbanked rural and semi-urban areas.
SK Finance Limited IPO Details
SK Finance Limited IPO Dates
It is a book-built IPO and the exact dates are yet to be announced.
SK Finance Limited IPO Price Band
The price band is yet to be announced.
SK Finance Limited IPO Lot Size
The lot size is yet to be announced.
SK Finance Limited IPO Objectives
The company plans to allocate the net proceeds from the issuance to the following purposes:
- The company aims to augment its capital base by ₹3,750 million to meet future business requirements for onward lending.
- It plans to allocate a portion of the net proceeds for general corporate purposes, capped at 25% of the gross proceeds.
- The offer seeks to enhance the company's brand and create a public market for its equity shares in India.
Peer Details
The following are the listed peers of SK Finance Limited :
- Shriram Finance Limited
- Cholamandalam Investment and Finance Company Limited
- Mahindra & Mahindra Financial Services Limited
- AU Small Finance Bank Limited
- Sundaram Finance Limited
- Five-Star Business Finance Limited
- SBFC Finance Limited
How to Check the Allotment Status of the SK Finance Limited IPO?
Steps to check IPO allotment status on Angel One’s app:
- Log in to the Angel One app
- Go to the Individual order details page of the IPO that you had applied for.
- Check the IPO allotment status. As such, Angel One will notify you of your IPO allotment status via push notification, email and SMS.
Contact Details of SK Finance Limited IPO
- Registered office: G 1-2, New Market, Khasa Kothi, Jaipur, Rajasthan, India - 302 001
- Phone: +91 141 416 1300, +91 141 416 1652
- E-mail:cs@skfin.in
IPO Financials
| Particulars | For the 9-month period ended December 31, 2023 | Year ending on March 31, 2023 | Year ending on March 31, 2022 |
|---|---|---|---|
| Total revenue from operations (in ₹ million) | 13,087.17 | 13,027.68 | 8,143.82 |
| Profit After Tax (PAT) (in ₹ million) | 2,171.01 | 2,227.86 | 1,428.74 |
| Cash & Cash Equivalents (in ₹ million) | 7,038.81 | 7,574.87 | 1,745.59 |
| Net Worth (in ₹ million) | 27,322.10 | 18,319.34 | 15,930.17 |
| Return on Equity (%) | 12.66% | 12.99% | 11.13% |
Know before investing
Strengths
4The company is recognised as the fastest-growing player in vehicle and MSME financing, with its vehicle financing vertical achieving a 41.07% CAGR between Fiscals 2021 and 2023.
It dominates the commercial vehicle financing market with a 57.88% share, excelling in customer engagement and risk management for small fleet operators and first-time buyers.
The company is poised to capitalise on the MSME sector's projected 18-20% CAGR growth by 2027, leveraging its strong presence and customer-centric approach in underpenetrated markets.
With a diversified funding source from 61 lenders and a strategic focus on securing long-term, cost-effective financing, the company is well-positioned to sustain and expand its growth trajectory.
Risks
4The company's business heavily relies on used vehicle financing; any adverse changes in this sector or government policies could negatively impact its operations and cash flows.
A significant portion of its customers are mid to low-income individuals in rural and semi-urban areas, making it vulnerable to defaults due to economic downturns or personal emergencies.
The company faces risks in recovering the full value of vehicle collateral or amounts outstanding from defaulted loans, which could adversely affect its financial health.
Its need for substantial capital and reliance on diverse funding sources could lead to challenges in securing low-cost funding, affecting liquidity and operational efficiency.
