22,124 on Nifty!

Jio’s Big Future Plans

Jio Financial Services cracked 7% after announcing its Q3 results. The company reported a 56% YoY drop in profit. But this was mostly due to an absence of RIL dividend income + higher employee expenses due to capacity building. It doesn’t matter too much because the firm hasn’t started its operations in a huge way. 🤓

What should matter though is its upcoming playbook. Here are the deets:

1) Secured loan boost: Jio has built out products for unsecured and consumer loans. But, after recent RBI action, the company is “accelerating” its focus towards the secured lending space. Key new products include supply chain financing solutions, leasing finance, loans against shares and home loans. 💰 

2) Soft launches: The conglomerate’s payment bank has soft-launched its debit card offering. They’ve also undertaken a re-platforming (or rebranding) to launch their digital savings bank account. Both products round out their offerings and were sorely needed. FYI – they’ve also added three new insurance companies to their list of insurance brokers. 💳

3) Ecosystem effort: Jio Financial seems intent on creating a ‘front-facing’ image for its consumer base. The company is setting up a dynamic QR code system across its ecosystem. It is also rolling out a new app for merchants, launching a voice box and enabling its Jio Bharat phones with UPI. 📲

Big Picture: It’s good to get a few more details on Jio Financial’s biz model, which has been sorely lacking. The new products indicate the firm is looking to take on Paytm (trying to steal their slice of UPI payments) PB fintech (insurance) and even Bajaj Finance (with supply chain finance solutions). That said, most experts say it will take quite some time before any of them really feels the heat. 😅

IPO Alert!

Medi Assist Healthcare IPO is open for subscription this week! The price band is fixed at Rs 397 – Rs 418 p/sh. The company aims to raise Rs 1,171-cr from the IPO. 💸

Founded in 2000, the company is a third-party provider of administrative services to hospitals & insurance companies. Put simply: it sits in between hospitals, insurers and patients. Medi Assist helps process insurance claims, starting from policy administration to customer service. It also provides other key services such as call centre & billing to big hospitals. FYI – the firm had a 26.4% market share as of FY23. Fun Fact: 27 out of the 29 general insurance companies work through Medi Assist.  They have a solid pan-India distribution network catering to 18,754 hospitals across 1,069 cities. 🏥

FYI – the IPO is a 100% ‘Offer for Sale’. This means that NO money will come into the business, which is a bit of a negative tbh. 👀

FY23 snapshot:

• Revenue: Rs 505 cr; +28% YoY
• EBITDA: Rs 119 cr; +31% YoY
• EBITDA Margin: 23.6% vs 23.2% YoY
• PAT: Rs 75 cr; +19% YoY

Big Picture: The company had a strong FY23. But its H1FY24 data shows that this year may be a little shakier due to higher employee expenses and a dip in margins. Most experts are bullish on Medi Assist for the long term. Why? Well, healthcare insurance penetration is still low. With a dominant market share, the company will benefit as it booms over the next decade. 📊

That said, customer concentration risks are real (71% of its revenue comes from top 5 clients). It also operates in a regulatory minefield. Any changes on the insurance front could affect its biz model heavily. FWIW – the valuations are reasonable and grey market data suggests it may list at an 8% premium. Quick update – the IPO is fully subscribed at the end of day 2. 💯

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