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.