Bandhan Bank - in a sweet spot?

(bimalb) #124

The below old report by JM Financial lays out detailed report on MFI sector, Bandhan Banks strengths/performance over peers and more.

Disc - Added last week and today and forms 5% of my portfolio.

(Ashish) #125

Given the swap ratio, if I buy 1000 shares of Gruh now @ 229.10, I will get Bandhan Bank @ 229100 / 568 = Rs. 403 per share. But Bandhan Bank’s share price as of now is 429. Normally such anomalies in the prices gets adjusted within a day or two of announcement but in this case the price arbitrage remains few days after announcement. What am I missing? Is my understanding wrong ?

Request senior members to suggest if I should buy Gruh or Bandhan. I am interested in buying Bandhan with a view of 5 years time horizon.

(Varun) #126

Buy Gruh…

This discount remains till the time deal closes. There is always a threat to a deal, so these discount are always there… they range between 4-6% in the start and then narrow down with completion of every regulatory step.

Since you want to buy Bandhan bank, why not buy gruh and get 5% discount on the price of bandhan? Also, if the deal falls apart, IMO gruh shares will recover more or fall less since, gruh on announcement fell much much more than bandhan.

(Vishal Bharti) #128

(S_Banerjee) #129

In continuation to my earlier post on experience with account opening,let me add some more.

Staffs are not so active in account opening formalities regarding documents verification. I had to call them multiple times on status and re submitted my rejected identity proofs.

Had to escalate the delay to nodal office then concerned branch manager took it up seriously and processed. 11 days to open account from application, still internet banking facility not activated.

They will ask ten thousands rupees for five thousands rupee min balance account. There is no specific guidelines or bank rules like this, on escalation they admitted it they request customer like this. Simple way of fund raising, a big negative to me.

Will closely monitor banking activity. A good thing that I joined their network to track them better.

(S_Banerjee) #130

How this new development on IL&FS case will affect above decision? Any views please.


(S_Banerjee) #131

(S_Banerjee) #132

Small finance banks have an important role in promoting financial inclusion & priority sector lending. Will hold meeting with MD & CEOs of small finance banks tomorrow(15th March 2019): Tweets @RBI Governor, @DasShaktikanta

(Multiplier777) #133

What is somewhat underappreciated in case of Bandhan is its casa ratio. A high casa ratio is the bedrock of any commercial bank and with a 41% casa ratio built within 3 years of operations is phenomenal. Incidentally, HDFC Bank also has the same casa ratio after 25 years of operations.

There are enough positives to flow for Bandhan in the short/medium term. Falling interest rates, some relief from RBI post merger of Gruh (& consequent reduction in promoter holding) as well as hopefully strong earnings growth in Q4 2019. With NCLT disallowing banks from declaring ILFS exposure as NPA without its permission, I wonder the fate of the conservative full Rs 385 cr provisioning already taken by Bandhan on its ILFS exposure.

(Ediacaran97) #134

Will dividends be liberal like what Gruh gives now post merger?

(S_Banerjee) #135

(pkk123) #136

From wikipedia:

(Multiplier777) #137

“The Bank’s CASA ratio stood at around 41% as compared to 43.9% as of December 31, 2017 and 42.0% as of September 30, 2018.”

This is what i have of the latest HDFC Bank casa.