Trade Finance & Investments Limited – IPO
Posted on the September 21st, 2011 under Analysts View,Initial Public Offering by Capital Alliance 
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Trade Finance and Investment Limited (TFIL) incorporated in 1978 is a registered finance company with an asset value of Rs.718m. TFIL earnings grew yoy 29% in FY11 featuring 18x trailing PER and 2.9x PBV.
Main business lines of TFIL include finance leases, hire purchase, security loans, personal loans and acceptance of fixed deposits. The company consists of 2 branches (Colombo and Jaffna) with staff strength of 25 overall.
TFIL deposit base as at FY11 stood at Rs.222m (up 24% yoy) while 4months FY12 deposits increased 11% yoy to Rs.247m. The lending portfolio mainly consisting of hire purchase and leases was at Rs.332m as of FY11 (38% yoy growth) expanding to Rs.417m 4months into FY12 representing 26% yoy growth).
Main purposes of the IPO are (i) regulatory requirement by CBSL to list, (ii) enhance stated capital over the statutory minimum of Rs.200m and (iii) expand by opening new branches.
Despite being on a relatively low base TFIL earnings grew at a Cagr of 34% FY08-11 while earnings for 4 months in FY12 is up 51% yoy, noting of the fact that it has zero long term debt.
TFIL is only issuing 6m shares (11%) to the public, increasing its share capital to 56.8m shares.
