IPO Update : IDFC Ltd.

Bet on Parekh, it's a long term play
IDFC is offering 40.36 crore shares through its initial public offer at a price band of Rs.29-34. Out of this 14.12 crore shares are offered to public.

Investment Guru recommends investors to apply in the IPO with a long term game plan. The stock is expected to bring smiles to investors in long term and reasonable listing gains also.

Let's look into the company
Management : The company is headed by Deepak Parekh who has taken HDFC to new heights. Under his able leadership and team full of stalwarts,the company should do well.

IDFC is an infrastructure play in business sense. The infrastructure sector is in limelight and is expected to be an outperformer in the long term. IDFC provides financing to Infrastructure companies.

With Infrastructure companies doing well, managing NPA's should not be an issue for the company. The company boasts of least NPA's among banks/financial institutions.

The company is focussing on the energy, trasportationtion ,telecommunications and oil and gas sectors to expand its financing.

IDFC's project finance assets (8000 crores) are as large as those of ICICI.

In the current year, company's share in the private infrastructure finance business is expected to be about 30%

IDFC Return on Assets (5.5%) is highest compared to any bank !!

The company has registered 18% increase in profits compared to last year (Profit after Tax Rs.304 Crores)

Senior debts forms the largest component in the financing portfolio and is an indicator of good quality of assets.

At offer price of Rs.34 at higher band, the stocks looks reasonably priced.

8 comments:

Anonymous said...

Excellent write-up Rajesh!
It's a delight to read your post.
Dharmesh

Sanjeev said...

Rajesh,

Analysis is power packed with facts and numbers!!! Good one

Sanjeev.

Ankit Singhal said...

i have been following your posts for last one month. You are a very sound investor. Your analysis of IDFC is very good. But, I am a student , age 22 years , have been in stocks for last 1 year and i will be looking at booking profits in IDFC on listing and reinvesting in another IPO. what would you advice?

sunil said...

ankit, I agree with investment guru that this will give better result in long run than listing gains.

Thanks Guru for your excellent advice. Just a small request that if you can put the post a little earlier, say two or three days before the IPO closes , I would be greatful, because i make my decisions two days before close.

This website is the providing the best advice. I go through many websites, but this is where I get the best.
I also want to acknowledge that thanks to guru I earned a handsome profit in Skumars.

Please keep guiding us.
Thanks again

Anonymous said...

please tell me wht to do with nectar lifescience..i bought 1k shares at 279 rs..on the listing day..shivers are running down my spines..i m losing more den 30,000 rs at the current market price..please tell me how long will i've to hold on to it to get back my investments if not any kind of profit..

Rajesh Soni said...

Dear friend,
I have told many times on my blog that one should never try to chase a stock. I sympathise with you . I am not sure if it is your money or have u taken a loan to buy a share.
Assuming it's your money, I would suggest that you start selling lots of 100/200 shares at every rise in the stock so that u minimise your losses. Start selling at around 265 levels.
Always remember one thing for future, Never over-invest in a single stock.

All the best.

cvrk said...

I agree with you on your observation of Mr. parekh. He leads whereever he goes!

Anonymous said...

hey i still dont know if i got IDFC allotment or not.. i applied thru ICICI direct , how do i chk ? i applied for 400 shares