Suryoday – ‘Sunrise’ in Sanskrit, signifies new dawn. It has received a Micro-Finance license from RBI in 2008, and within 8 years converted into a successful Small Finance Bank.
FY19-20 Performance:
(i) The company has shown exemplary performance in the year FY19-20 wherein, it has clocked Revenue of 854 Cr and PAT of 110 Cr as compared to 597 Cr and 86 Cr last year, respectively, representing a stupendous growth.
Revenue contribution (Cr):
| Year | Retail | Treasury | Corporates |
| FY19 | 590 | 44 | 8.15 |
| FY20 | 813 | 70 | 28 |
(ii) The loan book has grown from 3761 Cr to 5264 Cr in FY20.
| Year | Retail | Treasury | Corporates |
| FY19 | 1623 | 1239 | 11 |
| FY20 | 2897 | 1347 | 51 |
(iii) NIM – It represents how much is the net earning of the bank on loans given in the market.
Formula- ( Interest Earned- Interest Expensed)/Loan book
| Year | Interest Earned | Interest Expensed | Loan book | NIM |
| FY19 | 530 | 191 | 2769 | 12.24% |
| FY20 | 766 | 276 | 3531 | 13.88% |
The NIM has increased from 12.24% in FY19 to 13.88% in FY20- Good Sign
Analytical Ratios:
| Ratios | 2020 | 2019 |
| CAR | 29.57% | 35.02% |
| D/E | 3.86 | 3.09 |
| G.NPA | 2.79% | 1.81% |
| N.NPA | 0.57% | 0.44% |
| ROE | 11.21% | 14.26% |
| ROA | 2.53% | 2.58% |
(a) ROE has reduced in FY20 to 11.21% from 14.26%.
(b) D/E is manageable.
(c) G.NPA and N.NPA are under control.
Business Impact Due to COVID-19
As per management commentary, the loan disbursement in the lock-down period is sluggish and likely to improve as lock-down is removed in phases.
The Bank has made an additional provision of 65.99 crores (Retail banking 57.43 crores and Corporate banking 8.56 crores) for the potential impact of CoVID-19 as of March 2020. This provision is equivalent to 60% of FY20 PAT.
UnlistedZone Review:
The two important parameters to check the performance of the bank is loan growth and ROE.
Loan growth( in FY20) = 27% (Excellent)
ROE (in FY20) = 11.48% (Good)
Valuation– The book value of Suryoday Small Finance Bank in FY20 stands at 123 per share.
The latest price of the Suryoday Small Finance Bank in unlisted market is 260.
P/B = 2.11x ( Cheaper than AU Small and Ujjivan Small bank)
Last 5 years performance of the Suryoday Small Finance Bank
| Particulars(Cr) | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 |
| Advances | 582 | 983 | 834 | 1596 | 2711 | 3531 |
| Gross NPA | 0.13% | 0.18% | 6.15% | 3.15% | 1.81% | 2.79% |
| Revenue | 180 | 225 | 255 | 325 | 599.25 | 854 |
| PAT | 19.9 | 27.14 | 15.1 | 10.1 | 86.6 | 110 |
The IPO as per RBI regulation was supposed to come in 2020. However, due to COVID-19 impact, it may be postponed to next year.
