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Company Description Fusion micro finance limited provides financial services to unserved and underserved women in rural and peri-rural areas across India. Company’s network and services have improved accessibility to formal credit at affordable prices, thereby positively impacting the lives of their customers in rural India, and they were one of the youngest companies (in terms of getting an NBFC-MFI license) among the top NBFC-MFIs in India in terms of AUM as of June 30, 2022. Key pillars of growth include:

* Customer centricity

* Strategic geographic diversification with a rural focus

* Embracing technology for growth

* Emphasis on nurturing and developing personnel

* Good corporate governance

Company have achieved a significant footprint across India, where we have extended reach to 2.90 million active borrowers which were served through network of 966 branches and 9,262 permanent employees spread across 377 districts in 19 states and union territories in India, as of June 30, 2022. As of June 30, 2022, their share of AUM from customers in rural areas represented 91.37% of total AUM. Their focus customer segment is women in rural areas with an annual household income of up to ?300,000. Their business runs on a joint liability group-lending model, wherein a small number of women form a group (typically comprising five to seven members) and guarantee one another’s loans. Key product offerings are income-generating loans that provide capital for women entrepreneurs in rural areas to fund businesses operating in the agriculture-allied and agriculture, manufacturing and production, trade and retail, and services sectors. Technology is an integral part of their overall business strategy. Through early adoption of cloud computing software and emphasis on best-in-class security practices, they have established a foundation in enabling automation and digitalization of several processes across their business functions including customer onboarding, customer service, loan disbursements, internal audit and risk management. We believe that the foregoing has enabled them to successfully scale operations, maintain consistent growth in AUM and reduce costs. Products include:

* Agriculture-allied and agriculture

* Manufacturing and production

* Trade and retail

* Services

* Others

Valuation

Fusion micro finance limited has a pan-India presence and well diversified with proven execution capabilities with strong focus on rural areas and robust underwriting process and risk management policies with stable and experienced management team supported by marquee investors. It is having technologically advanced operating model and access to diversified sources of capital and effective asset liability management.

Fusion micro finance limited is available at the upper price of the band at 1.91x P/BV with market cap of ?37,032.11 million post issue of shares and return on net worth of 1.63%.

Fusion micro finance limited is fairly priced and we recommend a “Subscribe- Long term” rating to the IPO.

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