Hi- with due respect, your rather long winded analysis is flawed in key respects. quick summary:
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Other income is high so something is fishy- the other income is mostly fee income ( comprising 35-40% of total income) from their cards business which has been growing very fast, other major contributors are treasury income as bond yields fell and general fee income from their cash management business and FX brokerage. All of this is perfectly legit, all banks strive to increase this component as it does not require capital, Indian banks hardly do any prop/derivatives trading. The volatility in fee income is mainly from MTM gains/losses on Government bonds.
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They frequently need capital- true, so does Bajaj Finance, this is a function of their high growth rates, dilution depends on the book premium/discount at which capital is raised, this is an inherent risk in banking that needs to be factored in valuations.
The structural weakness of RBL lies in its rather weak liability profile ( 25% CASA) vs large banks and recent reliance on unsecured lending through credit cards and MFIs to drive growth rates.
Share price fall is due to a nervous market pricing in a readjustment to book value based on increasing credit costs and potential of further stress in the book. Unsecured lending has higher LGD vs secured loans making the market even more nervous.
Disclosure- no holding