On relatively slower disbursement growth
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Guys, Any comments about this?
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I feel it might be good for PNBHF - more the betters, better the price realisationā¦although not sure about it being positive for Bandhan(which has high NIMs which are not seen in home finance space)?
As a bank, bandhan would not be able to enjoy the kind of NIMs ,itās earning now although receivables would b more secured.Thecost of funds would go down , so the earnings.Every organization wants to b in all facets of financial activities for a long term survival and fight competition, however for short term it would be negative for bandhan
Would Bandhan make a merger or only controlling stake ?
It would be a āBandhanā
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PE majors among 20 in fray for PNB Housing - The Economic Times http://www.ecoti.in/drApla73 via @economictimes
The last date of submission of non binding bids was yesterday ie.,August 24th. Kotak Mahindra Bank, Dhfl, and Bandhan Bank among others are speculated to have submitted bids.
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Do we know the dates/timelines by when the binding bids are supposed to be submitted? Assume the company will have to shortlist the bidders first? Is there a specific criteria followed during such process? Thanks for your valuable reply and insights.
Do we know the dates/timelines by when the binding bids are supposed to be submitted? Assume the company will have to shortlist the bidders first? Is there a specific criteria followed during such process? Thanks for your valuable reply and insights.
Fullerton pulls out of race.
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Similar thing happened with canfin homes as well. Once the EOI & Bidding process started, few companies like Kotak pulled out of race as stock prices started moving up fast.
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Uday Kotak may acquire rival banks or PNB housing after RBI rebuff https://www.livemint.com/Companies/8FeT2NXK8DBUaHoiHpyovK/Uday-Kotak-Asias-richest-banker-may-acquire-rivals-after.html
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If they run the company well, this has to be a much bigger company 5 years down the line. Not sure what JPMorganās reasons are to downgrade. Any insights?
With 50% EPS growth expected this year, EPS if PNB housing will be 75 by the end of this financial year. Valued at 25 pe, target will be ā¹1875/- Even during bleak periods, market has given 20 pe rating to PNB housing which works out to ā¹1500/- Also market in its wisdom has given 60 pe plus rating to Gruh Finance. All other housing companies are valued at around 15 pe only. Even Indiabulls housing with such superb ratios has received only 15 pe rating, since the market suspects their corporate governance, the quality of their portfolio and the recent selling by the promoter group.
JP Morgan in its wisdom chooses to give 14 pe rating to PNB housing, thus valuing it at ā¹1050/- whereas the normal rating is 25 pe and thus ā¹1875/-
Bidders were prepared to give 6 times book for Canfin homes, but it was not sold. PNB being desperate to sell might accept anything above market price. Carlyle having sold recently at lower levels, will be prepared to accept any reasonable rate. Share price may shoot up during bidding and target of HDFC securities is ā¹1550/-
Buy PNB Housing Finance, target Rs 1550: Vinay Rajani - https://www.moneycontrol.com//news/business/markets/buy-pnb-housing-finance-target-rs-1550-vinay-rajani-2889451.html
We should ensure that share price does not go up too much, and that a bid with a fair price might be successful. If I were the new owner, I would buy back shares (when stock is selling cheap and not at premium like the IT companies) instead of dividend payout (and thereby paying foolish tax on dividends) and insist Sanjaya Gupta for ROE of 19% before any capital raise plans.
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All these firms have an agenda. JP Morgan in its wisdom must have deliberately priced it lower.Well run company with clean management gets a low rating based on imaginary fears. I have never trusted these marquee names. Once we are clear about the performance and management capability-rest will follow.
Disc-invested and willing to wait
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Had a casual talk with HDFC Ltd(Housing) raipur regional manager just wanted to post certain things related to sector
1.HDFC Ltd they usually are given 20% target and demand were so high till now thatfrom direct customers that they were getting targets completed never required to go chase builders for more customers and lot of rejection on loans happened as the focus was always on quality.
2.This year they are fighting to get even 8% growth although focus on quality is still there
3.Competition has increased very high in the sector and people are lending to any kind to chase growth.
4.Simple thing is supply has increased very rapidly and demand has gone down in a commodity business.
5.HDFC Ltd is still not compromising on quality though growth may suffer he donāt know how other players were growing that fast.
Disclosure: Not invested in any housing finance stocks and this is not buy sell advice. Just wanted to share some inputs I got in by chance meeting.these observations may not be valid completely on pan india basis.
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After 6 quarters of more than 8% QOQ growth rate, recent QOQ growth was less than 3% for PNBHF. Even PNBHF is feeling the pinch. I have got a feeling that good days for HF are behind us. Every Tom, Dick and Harry literally has a Housing Finance subsidiary now. The HF market is fully commodified. While the top line could grow, the bottom line will flatline due to pressure on margins, NPAs will increase and competition will persist till the stronger and niche survive and then growth may resume. Something similar to what is happening in PSU banks now.
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We had similar growth during September to December 2016 quarter. Growth is to measured not with the previous quarter but the same quarter of the previous year. There is no growth slowdown for PNB housing. They have only around 80 odd branches (against 200 for Canfin) and 30% of the growth each year is contributed by the new branches. 20 odd branches are being added this year. Indiaās mortgage to GDP is among the lowest in the world. 85% of the market is cornered by the top 5 HFCs whose credit rating is a moat. There are 20 bidders for this company (there were only 2 for Canfin) which means there will be a bitter bidding war. Competition comes and goes. Sanjaya Gupta welcomes competition. In a previous con call he has said that the more the competition, the merrier. He has also said that his first prayer on waking up and and his last prayer before sleep, is that his competitors donāt fold up. This is a man who prays for his competition, as he welcomes them. No wonder bidders compete to get this one.
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Was there any news on non-binding bids received by PNBH?