- AMC biz: if you go by previous time they were planning to sell, most of news paper reports of offer were around 1500-2000 cr
- Effective tax: 30% looks way too high. you can easily demerge idfc ltd and its IDFC first bank with no taxation (look at thomas cook - quess demerger - shares of quess being given to Thomas cook shareholders). Just keep in mind RBI has a 5 year timeline (till Oct 2020) where they have to hold 40% stake in Bank as promoter. Ujjivan / Equitas facing similar issues and RBI hasnt given them permission to merge holding company and small finance bank. so what will RBI do is anyone guess
- In their 1200 cr they said it as cash available for distribution, so am assuming this will be post capital gains / income tax. So net tax will be 15%-20% thanks to the new buyback tax
- Holding company discount: there is no guarantee that IDFC will do any of these (demerger, transferring shares) and RBI will give approval for that. So there will always be discount. how much is anybodys call
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Thank you Ajay for your valuable input… but according to your point 4… RBI may allow or may not allow… so I am not considering that point in my calculation… (If that happens, price should move up)… I am considering that they will give dividends from the business for perpetuity… Hence, I considered 30% tax rate and hence discount.
But still, discount of 40% to 55% looks irrational pricing…
IDFC FIRST Bank Q1-FY20 loss at Rs. 617 crore;
CASA Deposits, Retail Loans post strong growth
Bank reported loss of Rs. 617 crore for the quarter ended June 30, 2019; as a prudent measure,
the Bank took provision coverage to 75% for two identified corporate loans in the financial services
sector. Bank believes the provision is adequate and does not expect to take any more provisions
on these accounts in the near future.
CASA increased by 64% to Rs. 9,987 crore as of June 30, 2019, from Rs. 6,083 crore as of June 30,
2018.
Retail Loans as % of Total Loans increased to 40% (post-merger) as of June 30, 2019, from 11% as
on June 30, 2018 (pre-merger).
Net worth of the Bank stood at Rs. 17,545 crore as of June 30, 2019.
Total Balance Sheet size of the Bank was at Rs 1,68,705 crore as on June 30, 2019.
Total Loan book was at Rs. 1,12,558 crore as on June 30, 2019.
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seems like 75% provision for DHFL and Relcapital.
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Vaidyanathan a bit hesitating on the 5.6% stressed asset front when Latha asked about . Known demons are seems to be in control with provisions and retail book growing where as this 5.6 % stressed asset where the PCR is 55.9 % as disclosed on mar19 . Movement here and any new surprise would be key going forward .
Looking at ground condition, most of the banks and NBFCs have seen increase in NPA & stressed asset so things are not going good. There is also significant slowdown which could further hinder growth…
One more quarter need to be seen how its pan out…
Disc: Invested, not in hurry to buy
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Is 5.6% not ‘yield on Stressed assets’ rather than just ‘stressed assets’?
News share
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Can some one please explain me what is stressed Equity and SR’s : 2973 cr.
I dont think this was ever discussed, nor provisions done.
Net NPA (Rs 2700cr)+ Stressed/Provision on Sec Receipts of Rs 200cr (refer Q4’19 presso)
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CCD has a debt of about 8000 crore. Any idea if IDFC first has exposure to CCD ?
“Documents from RoC showed that apart from NBFCs like Aditya Birla Finance, ECL Finance, Shapoorji Pallonji Finance, banks like Axis Bank, Yes Bank and RBL Bank have exposures to Coffee Day Enterprises.”
According to CCD 2018 AR, they have toal of Rs.90 cr debentures exposure… No exposure to earstwhile Capital First Ltd. Attaching the total exposure of different companies to CCD from their AR.
CCD Debt 2018.xlsx (17.6 KB)
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IDFC first bank increase FD rates. they are offering 0.25% more for FD’s. This should help in further increasing CASA for the bank.
( 2 years earlier was 8.25%, they have increased to 8.5% ).
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Falling interest rate environment they are aggressive
Thanks
Ashit
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