Indiabulls Housing - A compounder from here?

The balance sheet is incorrect on screener since the company has not yet received the full payment of rights issue. Here’s the calculation of correct book value.

@ Guys can someone explain me this slide please.
10K is legacy loan. 4K recoveries are expected. So going forward provisions will be 6K. But where are these 10K on balance sheet - PNL?. Are they still in assets and not classified as NPA’s. Want to ask as not able to gauge how much of the old skeletons are factored in present BS- PNL and what will be additional surprises.

If you see in notes (just above your notes), it says “written-off” nothing in balance sheet but they expect to recover 40% at least so 4000 crs. Thanks!

Thanks Value V
Does it mean that whatever 4K recovery is done will be like bonus as already 10K is written off??

Also Santosh- the legacy book as they define is - loan book as of Dec 2022 or FY22 - need to check the concall as i was listening while sleeping. any thing prior to that is called as legacy loan book - they plan to reduce that to 5000cr by FY27.

The 10000 which you mentioned is not in balance sheet - its already written off, but trust me, whatever is being recovered - is being further utilized towards creating provisions on legacy book.

Like they did for AIF provision reversal this quarter.

Hope this helps

1 Like

i dont this divestment is needed, they are already operating at 1.5-2x levels of gearing and hence ROEs are suppressed, they are well capitalized with a CAR of 30% and above, if in case they are raising further equity, it only means , they need more CAR to wipe off bad loans.

so wahatever book value is there - it will be depleated due to provisioning, however, if they keep providing only rationally every quarter and keep diverting all the recovery amount to provisioning, there is till hope that it can attain book value multiples as mentioned by many boarders in above posts.

my best guess is - of the 19-20kcr book value - market is already factoring a default of 10-12kcr. of loan book. (As of March 22 - loan book was around 60k cr) - right now the AUM is 65k - waiting for breakup details in filings and concall transcript.

1 Like

Yes, it will be bonus but I would not consider it in my investment thesis as sep 2020 presentation, they mentioned that we should have received 58 rs as dividend for FY24. This is why it trades at half of book value and if you see they also use creative accounting for writeoff as they move money to reserve then debit to write-off hence not in PnL. You can see how they did for AIF.

disc: holding it in my portfolio.

2019-2020 was a different world for them, it was a different business model and cant be compared. That dividend proposition was based on party going on, which eventually stopped after ILFS. And most of their developer loans got stuck.

Hence cleanup, and change of business model.

Yeah but it was a way after ILFS crisis (around 2018) and this guidance was given in Sep2020 (after covid) besides my point was not regarding any specific details but was to highlight that we need to take whatever they mentioned in IP with a lot of salt. Thanks!
Disc. Has holding. may be biased.

1 Like

Hi @Vineet_Bhatia have you analyzed the filings. Looking forward to your views on this, if you could share. Also, based on your experience followings banks and NBFCs how would you look at the risk-reward ratio for IndiaBulls Housing?