Exchange Received Time 09/11/2021 15:38:20 Exchange Disseminated Time 11/9/2021 3:38:37 PM Time Taken 00:00:17
The Board of Directors (‘the Board’) of IDFC Limited (‘the Company’) at its meeting held today i.e. November 09, 2021 has inter alia considered the following:
The Board of Directors of IDFC Limited, as part of simplification of corporate structure, approved the merger scheme of IDFC Alternatives Limited, IDFC Trustee Company Limited and IDFC Projects Limited (wholly owned subsidiary Companies) into IDFC Limited subject to regulatory approvals from various authorities, as applicable.
The above information is also available on the website of the Company: www.idfclimited.com
The Board Meeting commenced at 11:00 a.m. and concluded at 3:00 p.m.
As I had mentioned before the cash on the books will be acccounted for seperately and the same has been done in the L&T deal as well-
For IDFC this cash was around 400cr at the end of FY21 and will prob be closer to 600cr by the end of FY22.
L&T deal at 38bn is around 5% of AUM and par for the course. If IDFC gets 4% of AUM works out to around 5000cr + 600cr of the cash on the books. Implies roughly 25x FY22 PE and 20x FY23 PE assuming 200cr of PAT in FY22 and 250cr of PAT in FY23.
This is incorrect information, everybody in the industry knows that L&T and Blackstone had agreed a deal way back in Oct 2020 but because SEBI was taking too long to approve the deal L&T decided to cancel it and do a deal with HSBC. You can check the same independtly but there is enough interest in AMC’s with guys like Blackstone, IIFL, PayTM and even HDFC AMC sniffing around.
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This is the calendar of events published by IDFC Limited for taking shareholder’s approval for merger of 3 subsidiary companies with itself…Is it normal for a company to take more than 1.5 months for such a trivial process as there is no business in those subsidiaries or it seems as if someone is still trying to deliberately delay the process…??
With the appointment of Singhvi the execution risk is considerably reduced and the only question that remains is when not if the process will go through?! It’s quite clear that he has been brought in by some of the large shareholders to complete the reverse merger process and that makes IDFC probably the best risk reward in the market currently. If you have the holding power for the next 9 months to 18 months you can put your money in IDFC and generate a very decent return with very little downside. This is assuming the bank doesn’t move from the current price and the AMC only gets 3-4,000cr. If the bank starts doing well and the AMC generates a good cash corpus then the upside is massive and the investment can easily be a multibagger. Just requires some more patience and with the markets looking a bit iffy going into 2022 makes sense to be in a name like IDFC.
1.5 months - 3 months looks fast to me. There is paper work and approvals from many different govt authorities and not all of them have any urgency to do things fast.
Just for reference a demerger of a company ( reverse of this process ) takes 8-9 months
That 1.5 months are just for taking shareholder’s approval, an internal process… they will move the application for regulatory approvals only after that I think…
Optimistic? VI issue is gone for IDFC FB, which was one of the big overhangs. Book will look much in better Q3 with nearly 400crs of VI provision released. CASA is there. Other businesses are scaling up nicely. No CG issues. Just trying to understand why wouldn’t IDFC FB move up post Q3?
Beyond the cost-to-income ratio (high due to investment costs), I don’t see any other reason for lower profits in IDFC FB which everyone knows is only a matter of time.
Only risk is OMICRON led NPAs. To that extent, I feel stock has corrected 10% from 51 highs prior to Omicron to around 46/47 last week.
Why cant the sale of AMC happen in parallel with the subsis merger process?
I find it strange that they aren’t able to conclude AMC sale at a time when everyone from startups to fintechs to incumbents are looking to be in Asset mgmt space. I mean sm AUM & a license is a pretty much sought after asset these days.
Disclosure :- Invested earlier. Exited after 2.5x gains.
Good work mr. Manikya in preparing the sheet, i appreciate ur hard work…
while i was going through the sheet there seems some calculation mistake…u have not deducted the sale costs while calculating the post tax cash or u can say net cash that the IDFC will be getting from AMC Biz sale…
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