Findi storyOne year ago, the company had a market cap of less than 20 m$.
Main reasons : typical micro cap company, which was struggling to find a good business model, kept doing capital increase and still had a large net debt.
1 year ago, the company began to show a large improvement of their earnings, on the back of a new management team.
Because they identified an interesting business model : install and operate ATM in India (90 % of their revenues now).
It is a business in India where they show an EBITDA margin of 40 % and an IRR of 35 %, when they own the ATM.
A lot of people (mainly out of India) were sceptical in particular because they considered ATM as a dead business, because the cash transactions were going to disappear very soon in most of the countries. Looking at India's trends, we can see that it is not the case for now.
Other interesting elements for Findi about that : when they invest in an ATM, they have a quick pay back of 3 years, so they do not bet on the long term for the ATM business.
Today's situation is very different from one year ago : Findi is now net cash and has a business which is showing a high level of free cash flow.
One investor (Perimal) has also susbscribed to a compulsory convertible bond, which will be converted when Findi's Indian subsidiary will be listed (probably at the end of 2026), based on a valuation of Findi, much higher than existing valuation when Perimal subscribed to this bond.
In the meantime, this bond has an interest of 8 % per year.
Despite the strong increase of its share price, Findi continues to look quite cheap and is much cheaper that comparable companies in India (cf Findi's last presentation).
Obviously, there are risks, like the long term visibility on ATM and the high dependance on 2 customers (2 large banks in India : CBI and SBI).
But it is also interesting to see the quality of Findi's management : they went from being an operator of ATM for banks (without owing the ATM), to being an operator of ATM that they own (still for other banks) and soon expected to own ATM at their own brand.
Thanks to these changes, they keep increasing their margin and return, while becoming less dependant on the large banks.
It also enables them to increase the duration of their ATM which also increase the return on their assets.
So, Findi is still interesting because the stock has still a significant potential to re-rate (based on comparable companies in India), while their earnings has still a real upside potential due to the opening of new ATM and the expected increase of interchange fees.
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