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Frontier Leasing & Finance


The company is a Non-Banking Finance Company (NBFC).  It was taken over by Essar Capital Finance Pvt Ltd with an acquisition of 72% of the equity capital of the company in 2010 (as at March 2011).  New management appears to wish to engage in the financing of commercial vehicles.

The company has no external debt and the resources of the company are tied up in loans of 20 crores presumably secured against commercial vehicles. The company generated net profits of about 50 lacs in the last 12 months on revenues of about 1 crore.

The fortunes of the company seem wedded to the interest rate cycle, which is on a negative uptrend currently on account of the RBI’s battle against persistent inflation.  It faces other risks of bad loans, high competition and large number of potential new entrants in the NBFC industry depending on RBI policy.

Management is planning to sell the finance undertaking of the business – and future plans are unknown – except for vague references to ‘horizontal expansion’ in the NBFC industry that it made in the open offer.  Moreover, it hasn’t declared dividends to shareholders yet and future shareholder returns appear to be highly speculative at this stage.
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