In case of HDFC Bank: HDFC merger, all the F&O contracts of HDFC were terminated 2 days before the record date. The same is expected to happen in IDFC.
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@Vineet_Bhatia : Management has guided for CI ratio of 65% for FY 27 , Secondly Cost of deposit is lowered assuming paying off all legacy liabilities in next 2 years and lowering of saving deposit rates by bank due to fall in interest rates and lesser deposit needed by bank
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Its better to look at guidance given 3 years back which was trumpeted in every quarterly call, then the guidance was swiftly changed in last 2 quarters of FY23 from c2i of 55 to 65. And if c2i remains elevated to 70 levels, consider the guidance as just mere words.
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Could anyone please throw some light on how the IDFC LTD future contracts would be handled? As per NSE website, they should be settled on closing price of the last cum-date:
Un-expired contracts outstanding as on the last cum-date would be compulsorily settled at the settlement price. The settlement price shall be the closing price of the underlying on the last cum-date.
However, some people are suggesting that they may continue the contracts till the expiry. Some people suggested that contracts would be expired on record date. Too much confusion.
The merger of IDFC will attract the same tax treatment as that of Tata Motors DVR? If so, is it beneficial in liquidating the IDFC than getting it converted to IDFC Bank?
Got confirmation from my broker that 9th October would be the last date for IDFC Ltd FnO contracts.
Merger complete and SHP of new entity is out along with other updates for the month of Sept 2024.
It looks like bank is at close to long term support of ~71. Hope all negative news flow is factored, overall Banking sector and IDFC First which was not participated much in bull run in last year will improve
Disc: Holding IDFC First, about 2% of PF with 3% loss.
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Nope, it will not be. You end up paying STCG/LTCG only on the fractional shares that are converted and paid as cash into your dmat account.
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Was comparing IDFC First Bank and Federal Bank Q2 Business Updates
Both IDFC First Bank and Federal Bank have released provisional business updates for Q2 FY25. Here’s a comparison based on available data:
Key Metrics:
| Column 1 | Column 2 | Column 3 | Column 4 |
|---|---|---|---|
| Metric | IDFC First Bank | Federal Bank | |
| Loan Growth (YoY) | 21.3% | 19.3% | |
| Deposit Growth (YoY) | 32.2% | 15.6% | |
| CASA Ratio (Sep’24) | 48.9% | 30.07% | |
| Credit Rating | AA+ Stable (CRISIL and CARE) | AAA (CRISIL) | |
IDFC First Bank (IDFCFB):
● Strong Growth: IDFCFB witnessed robust growth in both loans and deposits during Q2 FY25
●CASA Focus: The bank’s CASA deposits surged by 37.6% YoY, contributing to a higher CASA ratio. This indicates a shift towards a more favorable deposit mix.
●Legacy Debt Repayment: IDFCFB is actively raising funds to repay existing borrowings, explaining the higher deposit growth compared to loan growth.This strategy aims to improve the bank’s financial health in the long run.
●Recent Merger: The merger of IDFC Limited with IDFC First Bank concluded on October 1, 2024, resulting in zero promoter holding. This transition positions IDFCFB as an independent entity, which could influence investor perception.
Federal Bank:
●Steady Growth: Federal Bank also exhibited healthy growth in advances and deposits, though at a slightly lower rate than IDFCFB.
●Retail Focus: The bank’s internal classification reveals a higher growth rate in retail credit (23%) compared to wholesale credit (13%). This focus on retail lending could imply lower risk and potentially higher profitability.
●Stronger Credit Rating: Federal Bank currently enjoys a slightly higher credit rating of AAA from CRISIL compared to IDFCFB’s AA+ Stable. A higher credit rating suggests lower credit risk for investors.
Conclusion:
●IDFCFB’s strong growth and improving CASA ratio are positive signs, as expected legacy debt repayment and the recent merger might introduce uncertainties.
●Federal Bank’s steady performance, retail lending focus, and stronger credit rating present a more stable picture.
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All Banking Awards.
Vaidyanathan got Banker of the year. (At 44 mins in video)
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Hi James, do you view the increase in public holding as a concern for the merged entity?
Public holding for other banks ICICI/Axis is pretty low. Or, shall we view it as an opportunity given the FII/DII’s will buy.
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Dear @Ascendant , Thank you for asking. Please note that I am not an expert in BFSI sector to comment on this as I didn’t study the impact of small or nil promoter holding and/or impact of over/under ownership of FIIs in a bank. Personally I don’t consider this as a problem. RBI allows FDI to a certain percentage as maximum they can buy. I would just watch how the bank performs and walking the talk. My bet is on Vaidya and the journey of bank to a leading player. Also I consider banking sector is very risky and I am not very successful in this sector getting big winners. But now this lagging sector should do well and when it does I feel IDFC First will/should appreciate well. I hold few SFBs as well with small allocation ranging 1-2% to learn, understand and with hope of adding to it when the tide turns.
Disc: I hold the bank with approx 3% allotment and keep strict stop loss and can exit anytime as in BFSI there are many unknowns to my level of expertise. I may not disclose to this forum of changes in my holding. I am not qualified to advise.
In fact, I had exited when it breached 75 levels and then entered again as I thought it stabilised around 70 levels. I deserve my right to be wrong as I am not an expert in anything, invested based on probability of stock appreciation.
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Hi guys
I was reading about what happened to hdfc bank post merger with hdfc ltd.
It struck me that till now I never really bothered what is the business of IDFC limited.
Is it just a holding company? or there are business where need to check any skeleton can pe present which got merged into idfc first balance sheet?
thanks
IDFC didn’t have any business and this merger shouldn’t be compared with hdfc ltd and bank
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Does anybody got IDFC First share credited in exchange of IDFC Ltd ?
I read somewhere that shares will be credited before the 31st of October.
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