The sustainable growth of IPDC Finance Limited in the NBFI industry of Bangladesh

Abstract

IPDC Finance Limited is the first NBFI in Bangladesh to operate since 1981. Throughout the development of the NBFI Industry, many other significant peers of IPDC were included in the industry. With a large market of customers and top-performing peers, my key focus was to determine how the performance of IPDC finance limited has been affected by the changing market scenario in recent times. After conducting the literature review, I observed that the NBFI industry is growing in the financial sector and that the top three NBFIs hold more than 60% of the market share. This has prompted me to look at IPDC Finance Limited's financial performance from 2016 to 2020. From the literature review, I have concluded two hypotheses for my study. Firstly, IPDC Finance Limited has shown a sustainable growth pattern in recent years. Secondly, IPDC Finance Limited is performing better than other NBFIs in the industry. To conduct my research, I have taken data from the cash flow statement, income statement, and balance sheet of the IPDC Finance Limited annual reports. In addition, I have conducted an analysis of profitability ratios, liquidity and solvency ratios, efficiency ratios, leverage ratios, and market value ratios. I have also undertaken Market Value Added (MVA) and Economic Value Added (EVA) valuations. This analysis clearly depicts the sustenance of the financial performance of IPDC Finance Limited in our chosen timeline. Furthermore, I have compared the balance sheet's vital financial metrics among the Country's top five NBFIs, including IDLC Finance Limited, DBH, Lanka Bangla Finance Limited, United Finance, and my chosen Company, IPDC Finance Limited. From the 3-year comparative analysis of the financial metrics and based on the evidence provided in the balance sheet items, I can conclude that IPDC Finance Limited is performing relatively better than other competitors.