that is happening. please look at the newspaper advertisements for housing projects by big names like L&T, Godrej, Piramal, etc. The fine print usually says the project is initiated by some other company which appears to be in distress. These biggies are raking in the moolah by simply leveraging on their balance sheets and their brand names.
shiv kumar
I have said this before these guys are taking too much of reputational risk by lending the name. I know a project where Godrej is going to deliver lemon to its clients only because the construction activity was under the original developer. Somehow these brand conscious RE company like Godrej manage to scrub those reviews and feedback from the internet. There are many genuine projects where these guys bring liquidity and sales though. One needs to ponder how come a project would become viable after a new brand name that too at higher price because of marketing cut especially when it was not bankable by financiers or the customers just few months back. IMO, this trend is not sustainable for long.
[Bajaj Finance Vs SEBI]
In relation to previous discussion, the event lend some credence to my thought process. This is no way to question BF pedigree, but i think when one is riding a tiger, there is no way one can alightā¦
As far as growth is concerned, we are in rural, infra and housing. There is no denying that our absolute growth will be depending on the absolute growth in these areas. We will not not try and do something extraordinary or promise to grow 20% in a sector where growth is negativeā¦
One must read this news along with the concall transcripts.
Rs 3500 cr mentioned in the report would help L&T Fin to enhance provisions for losses in DHFL nnd Altico.
disclosure: holding
Any views on todays results? Going good under this black swan event?
Investor presentation / Results - 150 Cr profit compared to 550 Cr last year.
Biggest impact is due to provisioning - looks like they have provisioned 577 Cr taking total provisions (1244 Cr). Question really is - how much of the total loan book will default post-COVID? and what are the LTVs in each segment? Will be looking into the attached soon.
it looks some what good - as collection efficiency is high and good analytics in placeā¦ can it come back to more profit by 2022 in good levels with ROE crossing 20%?
Can experts advice on retail focus of L&T Finance and good RoE 15.8% - will add value in future? Management is good in right provisions and guidancesā¦ Is it going to be good bet in the contrarian lines? I listened concall, it is in right direction - my feel is - market valuation reflect rightly?
AGM update:
Nothing more than what was disclosed in the last concall of the company.
According to Dinanath Dubhashi, the company is expecting a good growth in its rural business. It is also reporting an uptick in the infrastructure business with construction activities re-starting
across the country.
Replying to a question on the rights issues by various financial
institutions, Dubhashi was non-committal about any such move by L&T Finance Holdings. He said the company would look at appropriate methods of raising funds when required.
Many share-holders wanted to know more about the provisions being taken by the company. Dubashi said provisions were taken as a matter of abundant precaution to protect the company. He said the provisions would be written back if required.
According to him, L&T Finance Holdings had the best costāto-income ratio among its peers at 26 per cent as the company kept its costs in check and concentrated on NIMs.
He denied that L&T Finance was laying off people due to the pandemic. However Dubhashi said non-performers were being weeded out as part of the organizationās appraisal process.
Others may update if I have missed out anything.
disclosure: holding
When other banks & NBFCs are not having larger provisions for Covid, L&T finance having 577 cr provision - not sure it is prudent, if things turning good, there will be write backā¦ else the risk covered this quarter itselfā¦ can financial expert advice? I saw Kotak is having 3 times of interest income + fees + other income (4497 crs) for the quarter, having Covid provision of 616 crs, why NBFC is having such provision and conservative? who is really smart?
Dinanath Dubashhi said they got some Rs 250 cr from sale of the business which was parked as provisions as a safety measure. Only time will tell whether management is expecting additional cockroaches to crawl out of the woodwork.
disclosure: holding
Shiv Kumar
Compared to banks , L&T finance has got exposure to Micro finance and Infra business in which no one can predict the impact of moratorium. If moratorium period is not extended by RBI then by sept/oct we will have a clear picture (90 days DPD from Aug). Q3 will be a very crucial for banks and NBFCās .
Some trigger for company will be stake sale in mutual fund business in future
Disclosure : invested
Board today approved rights issue of 3000 cr. Along with sale or mutual fund business for 3000 cr +as per media reports) ,company has got enough capital now. It will be interesting to see what is the right issue price and ratio, another news was there that parent company will also participate in right issue
L&T is likely to participate in the rights issue in order to enthuse institutional and retail investors. We have to see if the management offers to under-write any shortfall in subscription from the non-promoter category of share-holders.
Earlier Ajay Piramal had under-written the rights issue of Piramal Enterprises to ensure full subscription.
So this precedent is likely to be followed.
Disclosure: Biased because of holding in both L&T Fin and PEL
Please can anyone tell what is mean by right issue and what benefit will retail investors or shareholder will get from RE. Today I got few units in my demat account with the name L&TFH-RE-BE, not sure what to do , what would happen if I sell only L&TFH-RE-BE or keep(no action). thanks
Hi,
What you have in your demat account is Right Entitlement. These would be traded till Feb 10 like a normal stock. You can either choose to sell your RE or exercise them by applying for Rights Issue by Feb 15th. If you donāt do either, your RE just expires without any benefits for you.
thanks
You mean for each RE shares, currently I see 27Rs LTP, will I get that if I just sell the Rights or RE?
Can I also more than Rights Entitlement or I have apply only up to eligible RE?
