Tag: banking shares

HDFC Bank Enters $100 Billion MCap Club, Becomes World’s 7th Largest Bank – News18

Last Updated: July 17, 2023, 13:52 IST

HDFC Bank Merger: HDFC Ltd, HDFC Bank on Monday joined the exclusive club of companies with a market capitalisation of $100 billion. This makes it the seventh-largest lender globally.

Trading at a market value of about $151 billion or Rs 12.38 lakh crore, it is now the world’s seventh largest lender bigger than the likes of giants like Morgan Stanley and Bank of China.

HDFC Bank is behind JPMorgan ($438 billion), Bank of America (232 bn), China’s ICBC ($224 bn), Agricultural Bank of China ($171 bn), Wells Fargo ($163 bn) and HSBC ($160 bn).

The merger of HDFC Bank and its parent HDFC Ltd was completed on July 1. Today was the first day the bank’s stock started trading as a merged entity.

On July 13, the shares of HDFC Ltd were taken off the bourses as July 12 was the record date for determining eligible shareholders for share allotment.

On Friday, the bank allotted 3,11,03,96,492 new equity shares of face value Re 1 each to eligible shareholders of HDFC Ltd. As a part of the deal, every HDFC shareholder got 42 shares of HDFC Bank for every 25 shares they held in the company.

Accordingly, the paid-up share capital of the bank increased to 753,75,69,464 shares from 559,17,98,806 shares.

In terms of market value on BSE, HDFC Bank remains the third-largest Indian company behind only Reliance Industries (Rs 18.6 trillion) and TCS (Rs 12.9 trillion).

“Within this esteemed group (of $100 bn market cap), it also offers among the best metrics on earnings growth (17-18%) and return on equity (15%), making it relevant for global portfolios. It has the opportunity to leverage large customer base, group linkages to deepen customer-client relationships and drive revenues,” said Jefferies analysts Prakhar Sharma and Vinayak Agarwal.

The foreign brokerage firm has resumed coverage on HDFC Bank with a BUY rating and a target price of Rs 2,100.

“Merger broadens lending & cross-sell avenues especially in mortgages, insurance, MFs. Mobilisation of deposits should drive success & bank is seeing early success with branch expansion. We forecast a profit CAGR of 17% over FY23-26, ROA of 1.9% & ROE of 16% in FY25. Risk is from a spike in rates & lower PSLs,” Jefferies said.

Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. Among other things, financial market, economy and policies interest her …Read More

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July 17, 2023
IndusInd Bank Shares Rise 5% Today; Should Investors Buy, Sell or Hold the Bank Stock?

IndusInd Bank Shares Rise

IndusInd Bank shares rallied on May 8 after brokerages reaffirmed their faith in the private lender following a selloff on May 5

IndusInd Bank Share Rising Today: Shares of IndusInd Bank rose over 5 per cent on May 8 morning after brokerages reaffirmed their faith in the private lender following a selloff on May 5 in reaction to the resignation of the risk officer.

IndusInd Bank’s stock opened at Rs 1080 on the last day of trading and closed at Rs 1074.05. During the day, the high and low were recorded at Rs 1134.85 and Rs 1080 respectively. The bank’s market capitalization was Rs 87,672.28 crore. The 52-week high and low was recorded at Rs 1275.25 and Rs 763.75 respectively. On the Bombay Stock Exchange, 201,318 shares were traded.

The IndusInd Bank stock has lost 8 percent since the start of 2023, underperforming the sectoral benchmark Bank Nifty, which has given a return of 0.06 percent during the same duration.

The stock doesn’t fare too well on a five-year basis as well. IndusInd bank has lost 40.63 per cent of its value over the last 5 years. The Bank Nifty, on the other hand, has given a return of 63.45 per cent during the period.

IndusInd Bank Q4 Performance

Private sector lender reported a 46 per cent rise in net profit for the quarter ended March 2023 at Rs 2043 crore against the net profit of Rs 1400 crore in the March quarter of last fiscal. Interest income climbed 27 per cent to Rs 10020.71 crore in the last quarter against Rs 7859.89 crore for the March 2022 quarter.

However, gross NPAs rose to 5,826.27 crore in Q4 against Rs 5517.15 crore in the March 2022 quarter. In terms of percentage, gross NPAs stood at 1.98 per cent in the last quarter against estimates of 1.94 per cent.

The Board also recommended payment of dividend at the rate of Rs 14 per equity share of Rs 10/each of the Bank, for the financial Year 2022-23 (140 per cent), subject to approval of the shareholders at the Annual General Meeting.

Net NPAs rose to Rs 1714.96 crore in Q4 against Rs 1529.83 crore in the corresponding quarter of the previous fiscal. Debt to equity ratoio improved to 0.73 in Q4 against 0.76 in the fourth quarter of the previous fiscal.

The bank held contingency provision of Rs 1,900 crore as on March 31, 2023. During the quarter and year ended March 31,2023, the bank allotted 4,80,154 shares and 12,32,035 shares respectively, pursuant to the exercise of stock options by certain employees.

Meanwhile, shares of IndusInd Bank fell 2.23 per cent to Rs 1092.1 after the Q4 earnings announcements. It closed at Rs 1115.90 in the previous session on BSE. The stock of the lender has lost 9.66 per cent this year and risen 15 per cent in the last one year. Total 2.55 lakh shares of the firm changed hands amounting to a turnover of Rs 28.48 crore on BSE. Market cap of the bank fell to Rs 85,437 crore.

What Do Brokerages Say?

Morgan Stanley is “overweight” on the IndusInd Bank stock with a target price of Rs 1,525 a share. The firm believes that management changes are business as usual and is unlikely to have any significant impact on bank earnings.

Jefferies has a “buy” call on the stock with a target price of Rs 1,550 per share. The firm does not see the resignation of the chief risk officer warranting the 5 percent correction that was seen on May 5. The bank has also reappointed its chief compliance officer as assurance officer.

Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. Among other things, financial market, economy and policies interest her …Read More

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May 8, 2023
Bandhan Bank Shares Hit a 3-Year Low; What Investors Should Know

Bandhan Bank Share Price: Shares of Bandhan Bank hit three-year low at Rs 185.45 as they slipped 6 per cent on the BSE in Tuesday’s intra-day trade amid back of heavy volumes. In 3 sessions, the stock has lost more than 14 per cent.

The stock of private sector lender quoted at its lowest level since April 2020. It had hit a record low of Rs 152.35 on March 25, 2020.

The fall in trade today was backed by significant volumes of more than 17 million shares, more than 2 times the 6-month daily average trading volume of over 8 million shares.

In past two months, the stock has tanked 23 per cent after the bank reported a 66.2 per cent year-on-year (YoY) dip in its December quarter (Q3FY23) profit at Rs 290.6 crore, while its net interest income (NII) dropped 2.1 per cent YoY to Rs 2,080.4 crore.

The Bank said, fall in NII was mainly because the higher reversal of interest income and also increase the cost of funds. The Bank’s net interest margin for the quarter was 6.5 per cent compared to the 7 per cent last quarter. During the quarter Bank has sold written off loans Rs 8,897 crore at an aggregate value of Rs 801 crore out of that Rs 387 crore has been issued as Security Receipts.

Last week, the bank said it received a binding bid of Rs 740 crore from an asset reconstruction company for non-performing loans with an outstanding of Rs 4,930 crore.

Its board has given consent to transfer NPAs with an outstanding of Rs 2,614 crore to the ARC.

During the quarter ended December, the bank’s provision surged over 91 per cent on year to Rs 1,541 crore. As a result, net profit dropped 66 per cent to Rs 291 crore.

Bandhan Bank’s gross non-performing asset ratio was 7.15 per cent as of December 31, compared to 7.19 per cent a quarter ago, and 10.81% a year ago.

What Should Investors Do?

According to analysts at KRChoksey Shares and Securities Bandhan reported a subdued financial performance in Q3FY23, owing to slower growth in overall business, impacted NII Income and elevated levels of provisions which took hit on the overall profitability. The credit growth was modest owing to lower growth in its microfinance institution (MFI) segment, it added.

However, on the asset quality front, analysts remain cautious on the MFI stressed asset pool and accordingly kept credit costs slightly at higher levels. “We reduce our estimates for FY24E and have introduced FY25E. We expect CAGR in NII at 16.6 per cent, PPoP at 8.8 per cent, and PAT at 251.2 per cent over FY22-25E,” the brokerage firm said.

In its recent report, Nuvama Institutional Equities said that the earnings and valuation have bottomed out, and one could see them rebounding in FY24 on normalising credit cost, higher NIM, and asset growth.

However, it added that the long-term earnings visibility from the business transformation is low for the bank as it moves away from its core competency to intensely competitive segments.

As a result, the brokerage has a “hold” rating on the stock with a price target of Rs 265.

While the management seemed confident of the ongoing borrower behaviour corrections reflecting in the gradual abating of stress in its core Emerging Entrepreneurs Business (EEB) portfolio, we are cautious about any near-term outcomes from the bank’s hard pivot ahead, analysts at HDFC Securities had said.

Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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Aparna Deb

Aparna Deb is a Subeditor and writes for the business vertical of News18.com. Among other things, financial market, economy and policies interest her …Read More

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March 28, 2023
Equities Slip For 3rd Day In A Row; Sensex Down 18.82%, Nifty Below 17,830; Rupee Falls 9 Paise

Last Updated: February 21, 2023, 16:33 IST

The Sensex on Tuesday opened higher by about 80 points at 60,770.34, compared with the previous close of 60,691.54. (Reuters)

The BSE Sensex slips marginally by 18.82 points or 0.03 per cent to 60,672.72, while the NSE Nifty dropped by 17.9 points or 0.10 per cent to 17,826.70 points

The domestic equities market on Tuesday has witnessed a fall for the third consecutive session. The BSE Sensex slipped marginally by 18.82 points or 0.03 per cent to 60,672.72, while the NSE Nifty dropped by 17.9 points or 0.10 per cent to 17,826.70 points. The rupee has weakened by 9 paise to close at 82.82 (provisional) against the dollar.

The Sensex on Tuesday opened higher by about 80 points at 60,770.34, compared with the previous close of 60,691.54. During the day, the BSE benchmark index touched a high of 60,976.59 and a low of 60,583.72, before finally closing about 18.82 per cent down at 60,672.72.

Among the top gainers were NTPC, which rose 3.22 per cent, followed by PowerGrid (0.93 per cent), Reliance Industries (0.79 per cent), Tata Steel (0.76 per cent), and HDFC (0.48 per cent). The top laggards were Tata Motors (down 1.42 per cent), followed by Sun Pharma (-1.4 per cent), UltraTech Cement (-1.12 per cent), TCS (-1.05 per cent), and Wipro (-1.03 per cent).

Vinod Nair, head of (research) at Geojit Financial Services, said, “Despite opening gains, negative cues from global peers cast a shadow over investor sentiments. Underpinned by inflationary concerns, the market is keenly eyeing the US fed meeting minutes, scheduled to be released tomorrow, for hints on further monetary policy tightening. Risk appetite was further hammered by FIIs turning net sellers and fear of El Niño.”

The rupee on Tuesday also weakened 9 paise to close at 82.82 (provisional) against the dollar.

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Mohammad Haris

Haris is a business journalist with over eight years of experience. He writes on various issues related to markets, economy and companies.…Read More

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February 21, 2023
Sensex Rises 86.35 Points To 60,777.85, Nifty Above 17,870; Rupee Weakens 3 Paise

Edited By: Mohammad Haris

Last Updated: February 21, 2023, 09:59 IST

On the 30-share Sensex, NTPC was the top gainer with a 1.88 per cent jump, followed by M&M (1.15 per cent), Tata Steel (1.07 per cent), HUL (0.9 per cent), Bharti Airtel (0.81 per cent).

Experts say the market will continue to trade in a broad range of 17,750-18,150 since there are no triggers for a breakout or a breakdown crossing the upper or lower limit

The BSE Sensex rose 86.35 points or 0.14 per cent to 60,777.85 in the opening trade on Tuesday, while the NSE Nifty was up by 29.80 points or 0.17 per cent to 17,874.4. The rupee has, however, fallen 3 paise to 82.76 against the US dollar in the early trade.

On the 30-share Sensex, NTPC was the top gainer with a 1.88 per cent jump, followed by M&M (1.15 per cent), Tata Steel (1.07 per cent), HUL (0.9 per cent), Bharti Airtel (0.81 per cent). Among the top laggerds were Axis Bank (-0.78 per cent), ICICI Bank (-0.55 per cent), Maruti (-0.49 per cent), Tech Mahindra (-0.40 per cent), and Titan (-0.39 per cent).

Among the 30 shares on the Sensex, 13 scrips saw advances, while 17 witnessed declined.

V K Vijayakumar, chief investment strategist at Geojit Financial Services, said, “The market will continue to trade in a broad range of 17,750-18,150 (Nifty) since there are no triggers for a breakout or a breakdown crossing the upper or lower limit. At lower levels DIIs and retail investors will turn buyers and at higher levels FIIs will turn sellers. Trading opportunities are limited. But long-term investors can utilise the weakness in the market to buy high quality stocks in performing sectors.”

He added that autos is a segment to watch since this segment is coming out of a 5-year downturn and its prospects look good, particularly in the premium segment. Reports of very low hiring and retrenchment in the IT sector may impact sentiments in this space even though some mid caps like Persistent Systems are doing exceedingly well. Rising deposit costs are feared to impact the margins of banks even though credit growth continues to be strong. Top names in banking are good buys on declines.

On Monday, the BSE Sensex had declined 311.03 points or 0.51 per cent to close at 60,691.54, which was the fall for the second consecutive session. The NSE Nifty also slipped by 99.6 points or 0.56 per cent to end at 17,844.6 points. The rupee, however, had gained 9 paise to close at 82.73 (provisional) against the US dollar.

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February 21, 2023