There should be no direct impact on the companies or bank shares, but market works on perspectives and days like these give big shocks/opportunities to people depending on their emotions, perceptions, and risk behaviors.
Anyways this issue is becoming more like a hit-job (like Hindenburg) and market emotions are back to new “normal” - FIIs selling 5000 odd crores and DIIs trying to cover all of it.
Its not “we”, its VV who seems like always looking for one or other reason to put some extra provisions. Assume that this news came before results in October-end. Don’t you think he would have provided for this too? Bank would have gone in red with that.
I will go even further as to say even if there is a revenue impact, it will impact profitability of adani and not viability of the loan itself unless adani group faces liquidity issues.
That should also be the case with fusion microfinance loan also.
So all the provisioning idfc first did, a lot of it should come back post rights issue of fusion micro.
ATMOCTOBER20246CDDFC7E6BE7495B947FA39FD754E0C9.XLSX (29.7 KB)
This is Oct 2024 credit/debit card data for all banks. IDFC First seems to be significant player in Credit cards now.
Quiting below from an article on money control pro on fusion finance
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The lender’s biggest trump card is its promoters, mainly Warburg Pincus. The board has approved a rights issue, which shows that the promoters are willing to back the firm. While analysts have played down the auditor’s worry of remaining a going concern, they have flagged the threat to profitability in the near future. “Factoring in the sharp deterioration in asset quality and impact on growth/margins, we expect Fusion to report loss in FY25E, while recovery over FY26-27E should also be slow,” analysts at Emkay Global Financial Services Ltd wrote in their note.
Fusion cannot regain the faith of its investors by flaunting its promoters’ pedigree alone. The lender would have to bring down its problematic loans significantly in the coming quarters. It also must dispel the uncertainty surrounding its top management. The current chief Devesh Sachdev will step down from his executive role and take on chairmanship once a new chief executive is appointed. As such, the top management has seen changes with chief operating officer Tarun Mehndiratta having been replaced with Sunil Mundra. The new chief executive and his fellow executives will need to prove their mettle too. “
Looks like things are moving to get it back on its feet at fusion finance
This article talks about the current CRR percentages for large banks and the corresponding impact of today’s CRR cut by RBI.
Does anyone know the CRR for IDFC First bank?
Not specific to IDFC First Bank but just for sake of data…number of credit cards issued in america are huge and intrest charged. Now only time to come will tell if credit cards will have same future in india over next 10/15 years.
Should not be a problem for IDFC bank, as they are charging much lesser compared to others. VISA and Master card negotiate and charge per transaction (MDR), but interest part is totally under issuing bank’s jurisdiction. When I got IDFC bank’s credit card after few weeks of launching, I was given 12% interest, which they voluntarily reduced later to 9%.
ATMNOVEMBER20244B5CD28EDD114270ADC008F52CC6B0D7.XLSX (29.6 KB)
This is Nov 2024 credit/debit card data for all banks. IDFC First seems to be significant player in Credit cards now 7th largest by number of cards.
Business update by Bank for Q3 2025 is out today.
The annual growth in EPS is going to fall short.
EPS of 4.16 increased by 25% to 5.2 would be good. /But, it will fall short due to recent provisioning.
If EPS cannot grow by 25% then all these guidelines that they keep releasing will fail to impress.
Frankly I’m going in with pretty low expectations. Don’t grudge me for always being bearish about the results. Here is my reason. So far the Non MFI book of IDFCFB has been performing quite good, somewhere in line with the 1.65% credit cost guidance (Ex MFI) they gave beginning of the year. But Bajaj is reporting 2.15% credit cost with similar book yield. So IDFC credit cost could also go up. Also, look at Axis Bank results yesterday. It said that fresh slippages were up 46 % Y-o-Y and 22.25 % sequentially. Most of came from the retail portfolio. They don’t have MFI book, so all retail is non-MFI book obviously. So after seeing Axis Bank results, we can’t be sure. We must wait and see the results on how IDFC non mfi book performs.
For MFI business, the feedback about collections from all other MFI companies is still quite bad. Obviously, it will be bad here also. Also, with MFI booking to a screeching halt in the industry, many MFIs are talking about drop in income. Frankly, stock has not corrected since last quarter results … its staying around the 64. Meanwhile INDUSIND has come down a lot despite better results than IDFC.
Also management commentary was non committal last quarter for the remainder of the year… like “lets see how it evolves” kind.
I have had a salary account, which is also a 3-in-1 account with Zerodha, - IDFC Bank - and the bank has been the best bank for me with great SB features, great online interface, great cards etc. I cannot imagine having an account or card with Kotak. So ideally given all the growth in the bank and such a good CEO in VV, would expect this to be high
looking at price/book
Kotak (after the fall) and HDFC are at 2.7 Price/book and almost 0 returns over 5 years
IDFC First has a Price to book of only 1.4
Must be a screaming buy at this price. Am I missing something?
IDFC first bank has become a multibeggar in last 10 years. IPO came in 2015 at 70, in 2025 stock is trading at 65, equity has gone up 4 times. Marrying a bad stock will only erode wealth. Banking as an investment class is over now
ATMDECEMBER202438B02CA1A3AC4A2CB0702331BCE9CE34.XLSX (30.3 KB)
This is Dec 2024 credit/debit card data for all banks.
BFSI Summit 2025. start at 7.33.00 for private banking related discussion.
