Asset Strategy and Growth Post-Merger
Rationale for the merger
(Capital First Perspective)
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SECTION 1: BACKGROUND
Since 2010, Capital First created a strong retail franchisee in niche areas with strong asset quality with the help of strong
analytics and technology led underwriting framework.
In 2010, the GNPA and NNPA of the Company was at 5.28% and 3.73% respectively. But with the new management and
strategy to focus on the retail loans, the GNPA and NNPA was reduced and maintained at a sustainable level of ~1.8% and
~1.00% respectively continuously over the last 6 years. The asset quality stayed stable even during Period of rising interest rates
2011-14, demonetisation 2016, and GST implementation (2017)
• The loan assets grew at a CAGR of 29% and Profits grew by CAGR of 39% FY13 to FY18.
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The ROE turned positive over the years, and consistently grew to ~15% from a loss position in FY08 (Rs. 30 cr) and FY09 (Rs. 32
cr)
The Company cumulatively financed more than 60 lacs customers by FY18 through a retail distribution network which served
customers across more than 220 locations in India
However, the Company was interested in a Banking Platform for low and sustainable cost of funds.
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IDFC FIRST
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