IDFC Bank - Thoughts?


(sarvajeet) #147

Building a CASA franchise requires a lot of effort & also experience. To get a customer to keep money in CASA, the whole payments apparatus has to be built including bill/utility payments etc.

As an example IDFC Bank has tied up with Zerodha, to build a seamless account like ICICI Direct, wherein the customer keeps some portion of the money he wishes to deploy in MFs and Equity Share purchase. This is a Win-Win for both, given that Zerodha is crumbling under the weight of operations right now.

In essence it involves building the plumbing/works for the flow of various types of payments through a CASA account.

IDFC Bank has been building the plumbing so far, hopefully Vaidyanathan will take the infrastructure and quickly scale it up. I think the liabilities target is not a lot, given the size of book of Capital First.

It will be naive to assume that most banks have built in the infrastructure/plumbing for CASA. ICICI Direct has been a very successful product (although at a decline stage of product lifecycle). How many banks have been able to successfully imitate that.


(amitbansal01) #148

Q2 results are out:

On that face of it looks pretty poor

The 600 cr provision is finally done - hopefully no more bad loans / provisioning remain

However, my issue is the stagnation / fall in the revenues… with the increasing cost, there is a significant loss… my worry is that the growth May have plateaued and probably only the change in the management can reboot the growth…

Was planning to invest after a correction after this result (merger will take place between q2 and q3 result) as the provisioning / write offs would have been done now… however considering the market condition may wait for a bit longer to check what actions the new management will take to get back on the growth

Lets wait for the concall to see how Mr Lall spins his story this time…

Disc : invested and looking to increase stake at opportune time


(vaibhav) #149

Of the total provisions of nearly Rs 601.38 crore in second quarter, provision of Rs 344.48 crore is due to reclassification as per regulatory provisioning norms, Rs 197.13 crore is provision against investments including mark to market provisions in accordance with RBI guidelines, the bank said.

NPAs are reduced (nnpa 0.59%,gnpa 1.63%) which is good to see. Operating performance has been bad(high other expenses qoq) … Can it be partially put down to old management having no incentive… As they would be leaving in a month and handing over the keys to Mr. Vaidyanathan?

Disclosure : invested and looking to add further.


(vaibhav) #150

Q2 investor presentation -

Again posting Mr. Vaidyanathan’s interview which would be taken as how the new management assesses growth road-map for the future -


(ItosLemma) #151

Whats in a name ? Not sure of the value add, except for adding to painting charges in all the branches and other retail outlets.

IDFC Bank to be renamed as IDFC First Bank


(rupaniamit) #152

Mr. V. Vaidyanathan has proposed to board to share almost 10% of his personal holding in CF with senior colleagues, close family members, and family support staff. Shows the self-less character of the leader who is truly passionate about building an eternal organization by moving to banking platform and not after any monetary gains. He has not only shared his wealth with existing colleagues but also with former colleagues. This will just increase the loyalty and respect from the people that work closely with him. And as we know that loyalty goes long way in maintaining culture for an eternal organization. A special leader on the verge of doing super special things.

Disc: invested in CF and accumulating in SIP mode. Views may be biased.


(amitbansal01) #153

Impact of this new scheme declared by the Government today for MSMEs on IDFC Bank ?

Capital First (Mr Vaidyanathan) has been targeting the MSME sector specifically with their digital / fin tech approach which is a big USP in retailisation of the IDFC Bank loan book post merger.

While I have not gone through the fine print, the new scheme announced by the government provides the following :

  1. Quick approval (likely under an hour)
  2. Interest rebate - around 2% rebate for loans up to 1cr for GST registered MSMEs

Apparently public sector banks are pulled in for this purpose (not sure).

The question is how badly will it affect IDFC First Bank which had planned to aggressively target this space ? My guess is that the lure of interest concession / rebate (which has a direct impact on the MSMEs financial position) would impact the growth projections planned by the bank. But will need to wait and watch how the story unfolds.


(Bhambri3) #154

NCLT approves merger


(Dharmeysh Ashar) #155

As always, Mr. Vaidyanathan seems very enthusiastic about what he wants to do.


(sarvajeet) #156

He has had two good successes so far : being part of core team that scaled up ICICI Bank , and building Capital First from scratch. Most entrepreneurs are one-hit wonders!


(Dharmeysh Ashar) #157

Yes. In ICICI BANK he played his part in building retail liabilities and in CAPITAL FIRST he built retail assets.


(arunkp) #158

IDFC Banks new interest rates , Mr.V have started his work…

Balance in Rs. Interest Rate (p.a.)
Up to 1 Lakh 6.00%
> 1 Lakh to 2 lakhs 6.50%
> 2 lakhs to 10 Crores 7.00%

(ramanhp) #159

I am hoping they will have a better website soon. This one looks pretty plain and doesn’t gives confidence a bank site should. Looking forward to an effective re-branding.


(Chemist) #160

“If you end up owning a fantastic business, then plan to hold it for a long time. And prepare yourself for a roller coaster ride. If you have chosen the right business to own, the ride will be worth it in the end.” Prof Sanjay Bakshi


(James Sebastian) #161

On allotment of IDFC Bank shares to Capital first Holders.

Disc: Invested in CAPF.


(James Sebastian) #162

Shareholding looks as below, post merger

But I noticed that V Vaidyanathan and V. Vaidyanathan (In capacity of Trustee of Rukmani Social Welfare Trust) are listed among Public shareholders and classified under " Details of the shareholders acting as persons in Concert for Public along with another 4 more parties. Can someone explain why he is treated as Public and what it means acting as persons in Concert for Public means ?


(rupaniamit) #163

Example of Acting in Concert

It was alleged that Bill Ackman, leader of hedge fund Pershing Square Capital Management, and Michael Pearson, CEO of Valeant Pharmaceuticals International, acted in concert to try to purchase Botox maker Allergan Inc. in 2014. Ackman’s fund independently accumulated a large position in Allergan and then teamed up with Valeant to bid for Allergan. Allergan, which did not want to be acquired by Valeant, and two state pension plans sued Ackman and Valeant for violating securiities laws on the grounds of insider trading. In the meantime, Allergan began putting together a deal with Actavis Plc to thwart efforts by Ackman and Valeant.

Actavis and Allergan did end up consummating a deal in March 2015, which delivered a huge investment gain to Ackman. He squandered those gains and more, however, after he reinvested the proceeds into Valeant, whose enormous debt levels and alleged fraudulent accounting practices sent investors fleeing. Valeant stock had soared over $250 per share in July 2015; when Ackman sold his shares in March 2017, they were trading at around $11 per share. Adding insult to injury, Ackman was forced to finally settle the outstanding lawsuit against him, paying $193.75 million. Valeant agreed to pay $96.25 million, the other portion of the $290 million total settlement. Acting in concert with Valeant was a painful experience for Bill and Michael.

Source: https://www.investopedia.com/terms/a/acting-in-concert.asp

@james_kerala - since this is not a hostile acquisition/takeover, IMHO “acting in concert” may not apply to IDFC and Capital First case.


(Ranga Kiran) #164

(arunkp) #165