GUJARAT LEASE FINANCING L Share price

The Company was incorporated as a Public Limited Company on July 13 1983 as a wholly owned subsidiary of Gujarat Industrial Investment Corporation Limited (GIIC); a Government of Gujarat undertaking to provide complementary financial services. It received the Certificate of Commencement of Business on October 28 1983. The Company started its operations in the year 1985 by providing Lease Finance to various clients in Gujarat. Over the years the Company has emerged as a major national player in the field of financial services offering a variety of services and products to its customers.The Company made its public issue of Equity Shares aggregating Rs.5.25 crore in the month of October 1990. The Company has also made a Rights Issue of Equity Shares at an issue price of Rs.80 aggregating Rs.90.55 crore in the month of November 1992 in the ratio of 1 Equity Share for two Equity Shares held. The Company had also made a Bonus issue of 3762552 shares preceding this rights issue in the ratio of one Equity Share for every two Equity Shares held. In the year 1993 GIIC sold 3300000 partly paid Equity Shares of the Company to Torrent Investments Private Limited belonging to the Torrent Group promoted by Shri U. N. Mehta at a negotiated price of Rs. 105 per Equity Share. Subsequently in order to comply with the terms specified in clause 40B of the listing agreement with the stock exchanges Torrent Group of Companies made an open offer for acquiring shares of GLFL.The current shareholding pattern is as under:GIIC 26%Torrent Group of Companies 25%Public 49%The Company is recognised as a Non - Banking Financial Company (NBFC) governed by the Non-Banking Financial Companies (Reserve Bank) Directions 1977 issued by the RBI. It has achieved a capital adequacy of 16.61% as at December 31 1995 as against the capital adequacy requirement of 8% as stipulated by RBI.PRESENT BUSINESS OF THE COMPANYGLFL is a diversified Non-Banking Financial Company engaged in a wide range of fund based and fee based activities. The services rendered by the Company can be divided into the following four major divisions:CORPORATE FINANCE DIVISIONThis division offers the following products:1. Corporate Lease Finance2. Corporate Hire Purchase Finance3. Bills Discounting4. Inter Corporate LendingCorporate Lease and Hire Purchase FinanceThe Company has been active in these activities since inception and these products are fairly stabilised amongst corporates where the nature of finance is in the form of financial lease or hire purchase. The Company has a well diversified portfolio of over 500 clients catering to different industries such as Engineering Petrochemicals Construction Electronics Chemicals etc. The tenure of a typical financial lease or hire purchase varies from 3 to 5 years. The repayment is in the form of structured equated monthly or quarterly instalments. There is an elaborate appraisal procedure to analyse the credit risk of the client as well as the asset risk.Bills Discounting and Inter Corporate LendingThe Company started the Bills Discounting activities in early 1992. The basic purpose of providing the above facilities is to cater to the all round financial needs of its clients. These products are essentially short-term in nature and are targeted to meet the working capital requirements of the clients.RETAIL FINANCEThe Company started its Consumer Services Division in the latter part of 1988. The division began with providing finance for acquisition of automobiles mainly cars. Over the years the Company also entered into various other areas of retail financing by providing finance for two wheelers and consumer durables.With the automobile sector coming out of recession the production has increased substantially in the past two years and with newer entrants in the premium car segment the Company expects a major increase in the demand for car finance.The Company has an excellent record of recovery in the Car Finance business. This is due to a sound appraisal system being followed by the Company. A pool of car receivables portfolio of the Company has been securitised and rated AAA (SO) by CRISIL. This rating indicates highest safety alongwith a structured obligation.INVESTMENT BANKINGThe Company is registered as a Category I Merchant Banker with the Securities and Exchange Board of India. It commenced its Investment Banking activities in 1991 as an extension to the services provided to various corporate clients.The various products currently offered by this division are: 1. Issue Management of Equity and Debt2. Underwriting3. Corporate Advisory Services4. Bought Out DealsThis division has handled a total of 54 issues aggregating about Rs.556 crore and has also underwritten 310 issues for an amount of about Rs. 118 crore. In addition the division has provided funded support in form of Promoters'' Funding and Bridge Loan to the tune of Rs.54 crore. The Company has also entered into Bought Out Deals with medium-size unlisted companies with good growth potential to the tune of Rs.22 crore.Stock Market related OperationsThis division of the Company which became active in the year 1994-95 provides various schemes for financing activities which can be broadly termed as those falling under the umbrella of the Stock/Debt markets. These schemes provide finance to individual investors towards their investments in both primary and secondary markets.FINANCIAL RESOURCESThe Company''s activities in all the above mentioned business segments has been continuously on the increase since inception and to maintain this growth rate the Company has continuously tapped wide and varied sources of finance. The Company''s Working Capital needs are provided by a consortium of fourteen banks led by Bank of India. Major financial institutions like Unit Trust of India Industrial Development Bank of India Industrial Credit & Investment Corporation of India Industrial Finance Corporation of India SCICI Small Industries Development Bank of India EXIM Bank etc amongst others have reposed faith in the Company by extending various medium to long term facilities.The Company has also raised resources through privately placed Debentures and securitising a pool of car receivables portfolio which was rated AAA(SO) by CRISIL. The Company enjoys a MAAA rating for its Fixed Deposits and has a good track record in mobilisation of Fixed Deposits.