Monday, May 31, 2010


Micro finance is developing in India and
in Indian stock market as a new theme.
In a country like India with huge rural
population ,significance and scope of
micro finance is vast. Unfortunately ,
the main microfinance companies are still
unlisted and no scope for retail investors.
But it is a fact that a number of
foreign funds and P/E players are already
invested in such unlisted entities. We have
also three listed players in this sector
even they are not big in size. One such known
name is SE Investment. This company was in
news recently that its 40 Mn GDR issue
subscribed in just 8 hours.This clearly shows
the appetite of foreign investors in companies
from this sector. SE investment already given
almost 1000% return in two years.So let us
check other two companies from this space ,
First is Capital trust and next will be
discussed later. 
Capital trust

Earlier I have recommended this scrip
through MMB when it was  @ RS.13/- and
recommend a profit booking around Rs.30/-.
At present it is quoting around Rs.70/-.
Since there is lot of happenings in the company
and this sector after that now it need re -looking
into it. Capital Trust is a Delhi based company
started its operations way back in 1985.
It was jointly promoted by Mr. K. R. Puri
(Former Governor, Reserve
Bank of India), Justice M. H. Beg
(Former Chief Justice of India), Mr. S. D. Varma
(Former Chairman, Allahabad Bank) and
Dr.A.M.Khusro (Former Member
Planning Commission). Its operations were
only as an NBFC till 2009.Now there was a
change in management after the promoter
holding bought out by IC Constructions 
Services Ltd.They also came out with
an open offer at a price of Rs.10/-, and now they
holds about 70% stake in this company.
After the take over by new management ,now company
ceased all other financing
operations and started Grameen based joint
liability based microfinance. Company is now
operating on the rural markets in UP, Rajasthan
and Madhya Pradesh and Chattisgarh.
It has 23 branches and 150 staffs as on date.
Now the new management seems to be taking serious
efforts to grow this company in microfinance sector.
As part of their efforts in this line, now they are
inducting experienced hands from banking sector in
their board. Recently company inducted Mr.J S Tomar
in the board who served Oriental Bank of Commerce
for 34 years and rose to the position of
General Manager, holding charge of the departments
of Rural Development and Priority Sector,
Planning & Development and Recovery Management.
He also  pioneered the first pilot in Grameen based
microfinance launched by any commercial bank
in India in 1995. He also headed the Microfinance
Department of the Reserve Bank of India as Officer
on Special Duty.(from company web site)
          Again, the company has taken lot of
steps to improve the business which
includes writing off of Rs.1.6 Cr NPA generated
in old business to clean the balance sheet,
fresh fund raising for business expansion..etc.
Now capital trust is expanding
into five more states  and targeting
a mini branch network of 1585 and loan
outstanding of Rs.13700 mn
by 2015.Company has recently appointed
New York based Cedar Street Capital, to raise
Rs 200 million foreign equity and Rs 360 million
debt for its expansion plans.
Considering the efforts and signals from
the new management Capital Trust is expected
to be a  money spinner even from this level.
Risk takers can buy in small lots.
Coverage on the other company in next two days


  1. WHAT YOU THINK FOR gujarat leasing and finance in long term, results has shown some improvement and company is in strong hands of torrent group. please give your views.

    email id

  2. Sir,

    Lot of dirty things happening in Micro Finance. i read article about some district (i think kolar) where everyone has formed a union and defaulted. SKS microfinance promoters selling shares something wrong they are trying to exit
    by bringing IPO they know bad days are coming.

    For more :

  3. Dear Mahesh

    There may be such incidents ,as in the case of good and bad sides in everything.I read the article with the link you have mentioned. I am living in one of the places mentioned in the article and know personally that the case mentioned was not micro finance in true sense but money lending by some local people without any ethics and its consequences. I don't know whether the same happened in other places too or not.But I never expect such a report in a magazine like forbes india without checking the facts.Anyway ,there is some bad happenings also in this sector,avoiding such incidents and analyzing repayment capacity proprly is the key of success of any MF firm.

  4. Valuepick sir,

    Thanks for your reply :). Lets expect MF to grow :).

  5. Hi Valuepick,

    I have some doubts regarding Capital Trust

    Is there a possibility of this company still give multifold returns after it ran up so much?

    As this company is pretty old and very little sucess till today in whatever they have entered...i mean the history of the management?

    Any thoughts of SE Investment......Can i add this scrip even after so much runup ?

    Request you to please put some light on these queries?


  6. No relevance for the history of old management ,since them changed last year.

  7. ARMAN FINANCIAL bse code 531179 seems better choice than Capital Trust.Atleast Arman Financial they have never gone into loss since past many years.I feel recent foray into MFI will bring the company into greater dimension and forthcomming NP, thereby, entering into same league like SE Investment.One steal the opportunity at lower prices and have patience.Management is good and proven.It will go miles after miles.


    I am realistic and optimistic too I am here in stock MARKET for making money and not for promoting any company I just shared information I got It is upto the individual to believe it or not You can take example of jai corporation roumour/news way back in 2006 when it was quoting 200+ No one believed it and not a single expert made any recommendation to buy it but it went upto 25000 and even now stock is available at 262 but 1paid up and 1:1 ex bonus means still at 5000+ on a 10 paid up and before bonus Still jai corp is in doldrums but stock price you see why just because Anand jain close friend of Mukesh Ambani Friends here it is ZEE group fantasti promoter excellent credentials proven track record has taken over company a year back.He has invested billion rupees to see the company in action and make profit Yes it takes time because of several legalaties etc etc Now all these things are settled and company is about to run anytime now I have learned and I know one thing that in such stocks one should buy it when available without stop loss.Yes without stop loss otherwise you will be out and can never buy it Guy`s go for it with full faith atleast in ZEE management only Thanks ...

  9. KOPRAN bse code 524280@42/= is a great turnaround story of 2010.Exactly the same happend with LUPIN when it was quoting at 62/= way back in 2002 and looking at the low price I bought the stock in huge quantity.Lupin is now trades at 1900+ ex 1:1 bonus.I feel same thing is happening here with KOPRAN and looks super multibagger from hereon.In fact,it is another LUPIN in making.Good opportunity to grab such stocks and held on for super duper profits.Cheers.



Tweet TopOfBlogs