IndusInd Bank + Bharat Financial Inclusion

Finally the news is out. If someone could through light, how this would impact the overall business and what would be the cost of lending?

Indusind Bank is a solid business, so great compounder. After acquiring Micro finance business, will this not be exposed to frequent uncertainties ?
I am clueless here how to interpret it.
Any thoughts ?
Disclaimer - Invested in SKS Micro. No trade in last two years.

I am quoting just rough figures. Size of SKS loan book around 8000 cr. Size of IndusInd loan book is maybe 100,000 cr. So SKS portfolio will be just around 7-8% of bank. Why do you think entire bank will be exposed to uncertainties?

This 7,8% will grow at 40-45% while 100000 cr will grow at 25-30%. Thus it will grow15-20% more next 5 years. Thus non secured loan will be 18-19% in next 5 years. Here wiping out of 5-10% loan assets is common. This is the reason I feel this good bank may expose to uncertainty.
SKS itself is exposed to uncertainty but one year forward P/E is half in comparison to Indusind bank. So valuation comfort is there.

So finally the marriage is done and going by the share swap ratio, looks like IndusInd is valuing BFL at around Rs.1118. Won’t be surprised if the scrip opens 10 percent up tomorrow morning and heads towards 1200 progressively. All in all a great asset to own for IIB and in my humble estimation the positive rub off effect will reflect in the price of IndusInd scrip also. In one stroke, Mr. Sobti has ensured that he will have the most distributed rural presence of all the banks in India (except SBI off course). The ROE of the combined entity will be remarkably higher from FY19 onwards, once the demonetization and GST dust settles down. This act by one of the most respected banking management is a tremendous vindication of the potential that the MFI sector holds and I am quite sure we are at the beginning of a cycle of inorganic growth.

1 Like

Amazed to the see the amount of disclosures they have made.

1 Like

The company disclosed on BSE that it will conduct a concall for investors on 27-Jul-2018. I could not locate transcript for the concall.

Transcript or audio is not uploaded on researchbytes. If any member is tracking the company, kindly update.

Thanks

Can some experienced investors share impact of IndusInd bank exposure to il&fs on this company??

Can we continue discussing IndusInd Bank on this thread? :blush:

Yes we should. I don’t see a separate Indusind bank thread.

Quite jerky movements in this stock without any news. I seem to have read that they will do some sort of equity infusion (QIP or Preferential) somewhere in ValuePickr, that was forecast to be a downside. Average target of 1700+

OK results, 13% increase in PBT YoY and 33% in PAT YoY.
250 Cr is the provisioning in this qtr.

full investor ppt:
https://www.bseindia.com/xml-data/corpfiling/AttachLive/9b8c4499-ec77-47ec-af18-fedc672059ec.pdf

1 Like

Has anyone heard the full media brief by the management???

Any comments on SMA 1 and SMA 2 accounts by the management ???

SMA 1 and SMA 2 look elevated…both in terms of number of accounts and total money involved. That may be one of the reasons for the bank to have reacted negatively today.

If anyone has any idea… please do share.

Regards,
Ranvir Dehal

1 Like

Did not check the stock move, thought results release was timed for after markets!
Yes, much worse SMA numbers, not sure exactly but 2x worse looks like.

Stock jumped 3% then fell 7%. YoY comparison is bound to look good as BFIL merger makes the difference. QoQ cannot really comment. So, it will take another 1-2 quarters maybe to see a healthy trend.

Seems this isnt a new pledge creation , nor a sale by Citi. This is apparently formalization of previously pledged stock.

Mauritius-incorporated IndusInd International Holdings (IIHL) is the promoting entity of IndusInd Bank, which has over 600 investors and HNIs all over the world. They are today committed with the company for more than 25 years, their NAVs have risen substantially, they also want to part exit some of these investments. We decided to list IIHL, when you list you need an operating entity. So we decided to part leverage. In 2016, we decided to pick up some stake in MauBank of Mauritius. To pay for that, we decided to pledge some shares but eventually the sale did not happen due to pricing issues. We are still looking for more opportunities, so that the entity can become an operating firm and go for listing. When you renew the document, it needs to go to Sebi and stock exchanges, but it led to more confusion. But, we have amply clarified this.

We have just recently written to the RBI to increase shareholding from 15 percent to 26 percent. When I saw that Kotak Mahindra Bank has got a dispensation, we also thought of writing to them. Why not give us that dispensation as well? Let’s see how they respond” Ashok Hinduja, Chairman of the Hinduja Group of Companies (India), told the publication.
My message to the regulator is that, when the original licences were given, promoters could hold more, about 40-49 percent. The stronger the promoter, the more committed he will be — more capital will be infused by the promoter in the bank,” Hinduja said. IndusInd Bank stock has fallen almost 61 percent in the past one-year. “This is the right opportunity for us to support the bank, though it does not need capital for two years,” Hinduja said. “It is always better to come in when the prices are down,” he added.

1 Like
1 Like

Discussion with outgoing CEO Romesh Sobti and incoming CEO Sumat Kathpalia.

1 Like

Clarification on exposure to Covid-19 from the bank.

1 Like