Large Cap Blue Chips: IDFC- India's own Macquarie

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IDFC- India's own Macquarie

Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Large Cap Blue Chips
Forum Discription: You would not need to read any note, brokerage reports or wait for FII recommendation to buy these stocks. These are solid companies with established business & are akin to family silver.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=591
Printed Date: 02/May/2024 at 6:56pm

Topic: IDFC- India's own Macquarie

Posted By: Bobby
Subject: IDFC- India's own Macquarie
Date Posted: 16/Nov/2006 at 9:48am

there is news article in ET today mentioning that Morgan Stanley has bought 1 crore shares at Rs. 78.60 from UBS.
When all the inrastructure shares hv been multibagger why IDFC is lagging behind?
can we enter at these levels for long term perspectives.??
can members throw some light on this scrip?

Replies:

Posted By: prashant
Date Posted: 16/Nov/2006 at 10:30am

Hi,

My take on IDFC is , it will be a long term story and definitely a prospective multi bagger. They are currently operating on twin track. 1. Long term infra. investments, which have long gestation period 2. Short term infra. related investments, where they book profits in a couple of years of investment.

Due to this approach, their liquidity has improved. They have also tied up with BOI and some other bank recently to go for bigger funding and wider reach.

( I own this stock, so my views are of an interested party)

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Prashant

Posted By: nav_1996
Date Posted: 16/Nov/2006 at 10:37am

Also, it has already appreciated quite a bit and is no more a cheap stock as it is well researched and well managed.

So, i guess no quick money here. But should be 20%+ compounder for next 5 years

Posted By: basant
Date Posted: 16/Nov/2006 at 10:39am

IDFC is a financing agency. It does not go out and make those roads and dams etc. So if IDFC earns more then those pure infrstructure plays the latter would go bankrupt since infra players have to repay IDFC on interest and then make enough for themselves. SO while a Nagarjuna could go 3 times from here IDFC will grow slowly. The advantage is in durability. I think IDFC remains a good solid play on the Indian infrastructure boom.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: kulman
Date Posted: 26/Jun/2007 at 9:21pm

Infrastructure Development Finance Company Ltd http://www.bseindia.com/qresann/news.asp?newsid=%7b0120BC14-106E-43C8-9A4F-37584DB4328B%7d - (IDFC) has informed BSE that the Company has decided to increase its equity interest from 33.33% to 66.67% in SSKI, a privately held domestic corporate finance and institutional securities Company based in Mumbai. Through this investment, the Company and SSKI propose to work together by pooling their relationships and expertise to provide investment banking and capital markets solutions especially to infrastructure clients.

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Life can only be understood backwards—but it must be lived forwards

Posted By: kulman
Date Posted: 05/Jul/2007 at 5:26pm

Infrastructure Development Finance Company Ltd (IDFC) said on 5 July it has raised Rs2,100 crore ($519 million) through issue of over 165.3 million shares on qualified institutional placement (QIP) basis.

IDFC placed its QIP offering of Rs2,100 crore through issue of 165,354,330 shares at Rs127 a share, the infrastructure finance firm said in a filing with the Bombay Stock Exchange (BSE).

The issue generated significant interest from a number of high-quality institutional investors across Asia, Europe and the United States, it added.

Proceeds of the offering would be used to augment IDFC’s capital base, enhance strength of balance sheet for lending operations, provide seed capital to some of the funds the company manage, explore opportunities in principal investments and for general corporate purposes.

Complete story http://www.livemint.com/2007/07/05124307/IDFC-raises-Rs2100-cr-through.html - here on live mint

-----------------------------------------------------------------------

P.S.: JM & Kotak were book managers.

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Life can only be understood backwards—but it must be lived forwards

Posted By: kulman
Date Posted: 24/Jul/2007 at 11:31pm

Firangilals ke liye ek aur Index:

"New tools for investors seeking to access the Indian infrastructure market were unveiled on July 24, 2007 by global index provider FTSE Group ("FTSE"), and the Company (IDFC). The FTSE IDFC India Infrastructure Index Series will represent the performance of Indian companies listed on the National or Bombay Stock Exchanges in India, generating the majority of their revenue from infrastructure, and is designed to underpin the creation of index tracking funds and structured products.

FTSE IDFC India Infrastructure 30 Index

Top 10 constituents...

1 Reliance Communications Ltd. 10.0%

2 Bharti Airtel 10.0%

3 Bharat Heavy Electricals Ltd 10.0%

4 NTPC 10.0%

5 Larsen & Toubro 8.7%

6 Suzlon Energy 5.9%

7 Idea Cellular 5.5%

8 Jaiprakash Associates Limited 4.8%

9 Gail India 4.4%

10 Siemens India 3.7%

Source: http://www.ftse.com/Indices/FTSE_IDFC_India_Infrastructure_Index_Series/Downloads/FTSE_IDFC_India_Series_Factsheet.pdf - IDFC & http://www.ftse.com/Indices/FTSE_IDFC_India_Infrastructure_Index_Series/Downloads/FTSE_IDFC_India_Infrastructure_Index_Series_Ground_Rules.pdf - FTSE

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Life can only be understood backwards—but it must be lived forwards

Posted By: xbox
Date Posted: 24/Jul/2007 at 5:28am

pata nahi ye log TED index to standard kab manege.

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Don't bet on pig after all bull & bear in circle.

Posted By: kg
Date Posted: 10/Aug/2007 at 5:26pm

Has IDFC bought stake in IFCI ?

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Lets rock

Posted By: basant
Date Posted: 28/Sep/2007 at 10:51pm

It has a stake in NSE but the latest quarterly results of IDFC indicate some one time gains from sale of equity. Prima Facie I was excited to see the numbers because the PE looked cheap but I think it should grow at between 35%+ for the next 3 years and it has the kicker of fee based income coming in but since thata part of that income "profit sharing"is not definetive in timeline it would not excite the market as much as it should.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: kulman
Date Posted: 10/Oct/2007 at 7:07pm

This one is not much talked about.

Any views on IDFC?

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Life can only be understood backwards—but it must be lived forwards

Posted By: kulman
Date Posted: 14/Oct/2007 at 6:53pm

Infrastructure Development Finance Company (IDFC) on Sunday said it has http://www.dnaindia.com/report.asp?NewsID=1127546 - posted a net profit of Rs 375 crore for the half-year ended September 30, up 31 per cent from Rs 286 crore in the corresponding period last year.

The company's net interest income increased to Rs 329 crore during the period, a growth of 55 per cent over Rs 213 crore in the year-ago period, an IDFC release said here.

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The thread title needs to be amended suitably as this one doesn't seem to be lagging now.

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Life can only be understood backwards—but it must be lived forwards

Posted By: vip1
Date Posted: 14/Oct/2007 at 11:02am

The thread title needs to be amended suitably as this one doesn't seem to be lagging now.

Right Kulman, Why not IDFC ?

ALLOTMENT IN ISSUE IS ALREADY 5 TIMES FROM THERE IN 2-3 YEARS.

Posted By: basant
Date Posted: 14/Oct/2007 at 11:29am

Heading changed!!!!

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: vip1
Date Posted: 15/Oct/2007 at 1:00pm

Thanks Basant

Posted By: basant
Date Posted: 15/Oct/2007 at 1:04pm

No problem. IDFC is a great business and if anyone is holding it he should just do nothing. I know MS came out with a 200 target but those targets change every season (4 times a year).

I did analyse it very closely but as I wrote before - missed it. Doesn't matter as on date because Axis is doing well but a miss is a miss!

Posted By: deveshkayal
Date Posted: 15/Oct/2007 at 11:37am

IDFC has a 2-3-4 growth mantra.....................................Double the size of Balance Sheet, Triple Investment Banking business and Quadraple the AUM in the next 5 years.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: totalequities
Date Posted: 17/Oct/2007 at 9:29pm

Some frontline stocks have large holdings through P-Notes. Among those stocks IDFC is one of those. 11% is held by P-Notes based on 30 June 2007 data published in todays CLSA report.

Other stocks which have substantial high component of P-Notes are HDFC, ICICI Bank, AXIS Bank, Tata Steel IBREL, PNB, M&M, Bharti.

Posted By: basant
Date Posted: 17/Oct/2007 at 9:37pm

Where can one get all these details?

Posted By: totalequities
Date Posted: 17/Oct/2007 at 9:45pm

I got the detail from a research report issued today by CLSA.

Posted By: deveshkayal
Date Posted: 18/Oct/2007 at 12:56pm

Basantji can you change the Title of this thread to "IDFC- India's own Macquarie ! "

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: basant
Date Posted: 18/Oct/2007 at 12:59pm

Is this a copy of that buisness model?

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: deveshkayal
Date Posted: 18/Oct/2007 at 1:05pm

I read somewhere that the business model is more on the lines of Macquarie.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: deveshkayal
Date Posted: 18/Oct/2007 at 11:08am

Citi on IDFC:

IDFC's 2Q08 net profits rose 25%yoy in-line with expectations. Key positives were improvement in NIMs, strong loan growth and fee momentum. Asset management returns and fund raising plans are also
ahead of expectations and could provide valuation upsides.

IDFC's NIMs increased to 320bps (+40bps qoq) driven by a favorable interest rate environment and helped by additional capital raising during the quarter. We expect margins to be protected in a declining interest rate scenario.

IDFC's core fee incomes continued to show strong momentum (+72% yoy ex-SSKI). We believe, IDFC's fee income has significantly diversified and deepened over the last 2 years. Unrealized gains have increased to Rs3.24bn and provide earnings comfort.

Management indicates that IRRs on its first PE fund are over 45%; expects contributions to performance fees from 3Q08 and plans a new fund launch in early FY09E – ahead of expectations and could drive valuation upsides.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: deveshkayal
Date Posted: 18/Oct/2007 at 11:20am

GOI plans to spend 14500 bn during the 11th plan (2007-2012).

IDFC's Gross NPA stood at 0.2% while Net NPA are NIL.

Strong risk management system with massive oppurtunity.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: basant
Date Posted: 18/Oct/2007 at 11:33am

My only problem with IDFC was a) relatively high market cap and b) slower growth @ 35%-40%. Otherwise it remains a rock solid play for any investor.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: jack
Date Posted: 26/Oct/2007 at 7:59pm

Basant, whether present IDFC market cap is justified? Or it will be high PE story like HDFC and HDFC bank, eventhough the business model is different.

Posted By: basant
Date Posted: 26/Oct/2007 at 8:02pm

Seems Ok except that it has run up a bit? The business model is excellent though.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: kulman
Date Posted: 21/Nov/2007 at 5:20pm

Luis Miranda wears his passion on his sleeve, literally. On Monday, he came to office in a shirt that bore the logo and symbol of Manipal Health Systems (MHS), one of the 22 infrastructure companies funded by IDFC Private Equity.

As president and chief executive officer of IDFC PE, the first private equity firm with a sole focus of funding infrastructure companies in India, Miranda said: “Everyone loves bitching about the poor state of infrastructure in the country, but hates to do anything about it.”

With $630 million under management between two funds, his deployable reserves fast depleting, and infrastructure taking centre stage now, Miranda is planning a third fund. He wants to complete raising it by the first quarter of the next financial year.

“...we are targeting a little over $500 million,” Miranda said, citing his apprehension over the amount of money getting raised at the moment and valuations that look unreasonable as reasons why he has not set any lofty fund-raising targets.

Currently, there’s anywhere between $5 billion and $10 billion being raised for India-dedicated infrastructure projects.

“People will wake up one fine day, and see that private-equity valuations are beyond what they should be. It’ll be something like the world suddenly waking up to the sub-prime mess in the US credit market,” he said.

But the government’s gung-ho attitude towards infrastructure waters down some of Miranda’s valuation concerns. The government has said that the country requires about $500 billion in infrastructure spends till 2012. “There is no doubt about the huge opportunity in this space. The investment framework from the government is also falling in place,” he said.

“But is the government simultaneously working on 20 airports, as it should be? No. Is it simultaneously working on 50,000 km of road, as it should be? No,” he said.

On whether he would have to compete with the IDFC-Blackstone-Citigroup combine for deals, he said: “We are not in the same space as them. While they are looking at assets with cash flows, which yield returns in their mid-teens, we will typically looking at doing private equity type of deals, investing in holding company structures, and exiting for capital gains in excess of 20%.”

Complete article: http://www.dnaindia.com/report.asp?newsid=1134514&pageid=2 - http://www.dnaindia.com/report.asp?newsid=1134514&pageid=2

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Wireless telecommunications services provider GTL Ltd and IDFC Project Equity Company, a wholly-owned subsidiary of Infrastructure Development Finance Company Ltd (IDFC), will form a special purpose vehicle (SPV) that allows GTL Infrastructure Ltd to pursue acquisitions and strategic investments into telecom tower infrastructure companies being hived off by telecom operators and other independent tower companies. The two companies have signed a memorandum of understanding to this effect.

As per industry estimates, there are over 1 lakh towers in the country today, but with more than 40% of the population yet to be covered with cellular infrastructure, at least 2 lakh more towers would be required. Bharti has around 40,000 towers, while Vodafone Essar has 20,000 and BSNL about 15,000.

The telecom regulator has allowed sharing of passive infrastructure in a bid to reduce capex requirement for operators to provide services in the semi-urban and rural areas.

As per GTL Infra’s April data, it charges a rental of Rs 40,000-45,000 per month from the anchor tenant with an Ebitda margin of 40-45%. The usual life of a tower is considered to be around 25 years and the asset is depreciated over a period of 7-15 years.

Around 60% of the cost goes into erection of tower, 20-25% into setup of other cell site facilities and the rest goes into pre-operative costs like signing land lease and obtaining licence from local bodies.

In the US, specialised players run the tower infrastructure business of most operators. Some, such as American Towers and Quipo, have also entered the domestic fray. By the rush of players, it appears that this space has a lot of potential, but one needs to wait and watch trends in tenancy, and the emerging competition in this space.

Source: http://www.dnaindia.com/report.asp?newsid=1134512&pageid=2 - http://www.dnaindia.com/report.asp?newsid=1134512&pageid=2

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Life can only be understood backwards—but it must be lived forwards

Posted By: deveshkayal
Date Posted: 21/Nov/2007 at 5:37pm

What is the market cap of Macquarie ?? I am not getting it on Yahoo Finance.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: omshivaya
Date Posted: 21/Nov/2007 at 6:00pm

Devesh jee, maybe this'll help:

http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=MQG.DE - http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?symbol=MQG.DE

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The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it

Posted By: deveshkayal
Date Posted: 21/Nov/2007 at 6:11pm

Thanks Omji !

Then its not expensive even at $6bn. Some more room to grow !

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: s_praharaj
Date Posted: 28/Nov/2007 at 10:19pm

I also like IDFC and I am sure, it is going HDFC way.

We were getting some beautiful research reports from SSKI.

From last month onwards with SSKI, name of IDFC is also there on the front of the report. Seems amalgation process is over.

Seeing the infrastructure boom presently sweeping India, IDFC is the one which will definitely be benefitted to the maximum. Its a dark horse, which can be slowly acquired.

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Shashi Praharaj

Posted By: deveshkayal
Date Posted: 28/Nov/2007 at 10:23pm

Originally posted by deveshkayal

IDFC has a 2-3-4 growth mantra.....Double the size of Balance Sheet, Triple Investment Banking business and Quadraple the AUM in the next 5 years.

Can somebody analyse the above statement and tell ballpark market cap figure 5 years from now.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: deveshkayal
Date Posted: 28/Nov/2007 at 9:40am

The Planning Commission has estimated infrastructure spend during the 11th Five Year Plan (2007-12) to increase by 133% to $445 billion from $190.7 billion spent during the 10th Five Year Plan (2002-2007). A large portion of this spend should fall into the private sector’s lap.

One of the biggest beneficiaries of this would be the Infrastructure Development Finance Company (IDFC), which provides funds to infrastructure undertakings in sectors like energy, telecom & IT, transportation, industrial and commercial sectors.

Notably, apart from fund-based activities, IDFC is building a sustainable business model that will help shore up the share of non-interest income.

Analysts expect non-interest income to grow at a compounded annual growth rate (CAGR) of 62% over the next two years, resulting in an increase in its share of total income to 24% in FY09 from 18.8% in FY07.

What makes this possible? IDFC increased its stake in SSKI, a leading brokerage firm providing a range of financial services like advisory services, private placements and investment banking, to 66.67% from 33.33% in June. SSKI enjoys net profit margins of around 30%, say analysts. They expect SSKI to clock revenues to the tune of Rs 140 crore in 2008 and Rs 186 crore in 2009.

IDFC’s asset management business currently manages funds worth $660 million and is in the process of raising a project equity fund along with Blackstone and Citigroup.

The first tranche is expected to be around $600 million. Analysts maintain that IDFC will have funds to the extent of $3 billion in the next three years, which will generate management and performance-based fees. This indicates robust cash inflows for the company, going forward.

Meanwhile, for Q2 ended September 2007, IDFC’s revenues were up 63% at Rs 655 crore, while net profit grew by 28% to Rs 197.72 crore, thanks to a sharper rise of 69% in interest costs.

Interestingly, in a scenario where most lending firms are faced with the challenge of non-performing loans (NPAs), IDFC has a track record of zero NPAs, thanks to its stringent lending norms, say analysts.

Also, in July 2007, IDFC raised Rs 2,100 crore through qualified institutional placement, leading to an equity dilution of 15%. This should help ease pressure on the debt side of the balance sheet.

At Rs 200.35, the stock trades at 28.6 times its estimated earnings for 2009. Though valuations appear expensive at these levels, analysts have valued IDFC at Rs 276.9 on the basis of a sum-of-the-parts valuation. Needless to say, they have a buy on the stock. (DNA)

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: deveshkayal
Date Posted: 03/Dec/2007 at 7:50pm

Morgan Stanley on IDFC

Indian GDP is forecast to grow at a 12% nominal rate in F2009 (>20% in US$ terms), infrastructure spending as % of GDP will rise, and IDFC is gaining share in infrastructure financing. This has caused growth at IDFC to exceed our and Street estimates (consensus has revised F2009E earnings up by 30% this year). Given its size (balance sheet is still less than US$6 billion) and the size of the opportunity, we believe
that IDFC can continue to deliver strong growth. We expect core revenues to register 54% CAGR in F2007–09. We reiterate our Overweight rating on IDFC shares and raise our price target to Rs250.

Current rates scenario implies that net interest spreads will remain healthy. We expect rates to stay at current levels and possibly decline over the next year if the Fed cuts aggressively. This should benefit wholesale funded institutions, e.g., in the last Fed cycle,
HDFC saw spreads move up sharply. We also expect continued strong growth in fees from lending activities.

Non-lending businesses/investments are doing very well. IDFC has launched first tranche of proposed US$2 billion project equity fund. This will result in doubling of assets under management in current quarter. The first fund could start generating performance fees in the next few months – earlier than we expected. Other proprietary investments are doing well.

Valuations, at 21x core earnings and 3x book, leave scope for upside. Our revised target price implies that the lending business will trade at 22x one-year forward earnings. Given that the market is trading at 18x and IDFC possibly has superior returns and growth profile, we see scope for upside.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: kulman
Date Posted: 03/Dec/2007 at 9:09pm

Deal Date	Scrip Code	Scrip Name	Client Name	Deal Type *	Quantity	Trade Price
3/12/2007	532659	INFRA DEVFIN	LOTUS AMC INFRA FUND	B	425000	205.00
3/12/2007	532659	INFRA DEVFIN	UTI MUTUAL FUND	B	3400000	205.00
3/12/2007	532659	INFRA DEVFIN	MERRILYNCH INVESTMENT MANAGER A/C MERRLYNCH INDIAN EQUITY FU	B	2500000	205.00
3/12/2007	532659	INFRA DEVFIN	BARCLAYS CAPITAL MAURITIUS LTD	S	6325000	205.00

Source: Block deal data on BSE http://www.bseindia.com/mktlive/market_summ/block_deals.asp - http://www.bseindia.com/mktlive/market_summ/block_deals.asp

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Life can only be understood backwards—but it must be lived forwards

Posted By: basant
Date Posted: 03/Dec/2007 at 10:09pm

When the stock price approaches Rs 250 we would have another upgrade!!!

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: deveshkayal
Date Posted: 03/Dec/2007 at 10:14am

The report was by MS but stock was bought by ML

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: chic_1978
Date Posted: 04/Dec/2007 at 10:14am

devesh

wot is ur target for idfc....

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happy & wise investing

Posted By: deveshkayal
Date Posted: 04/Dec/2007 at 10:17am

No idea on target price but since two great investors (Kulmanji and Shashi ji) are invested, then it must give you good returns.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: kulman
Date Posted: 05/Dec/2007 at 1:52pm

Devesh...there seems to be some typo error in your post.

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Life can only be understood backwards—but it must be lived forwards

Posted By: deveshkayal
Date Posted: 05/Dec/2007 at 3:21pm

No typo error ! You are sitting on a 10 bagger in L&T.

I think the valuations of brokerages have increased, so that's having a rub-off effect on IDFC-SSKI.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: chic_1978
Date Posted: 05/Dec/2007 at 3:46pm

kulmanjee

then wot is ur target for idfc.....is it a multibagger ....

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happy & wise investing

Posted By: kulman
Date Posted: 05/Dec/2007 at 3:58pm

Chic ....frankly I have no idea.

In my opinion, it's going to be worth holding for many more years through ups & downs.

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Life can only be understood backwards—but it must be lived forwards

Posted By: India_Bull
Date Posted: 05/Dec/2007 at 4:07pm

Kulmanjee is sitting kully on more than 30 bagger (Mr. Naik of L&T said L& T went up by 30 times in last 3-4 years !! I think Kulmajee is holding it since long long time.

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India_Bull forever Bull !
www.kapilcomedynights.com

Posted By: chic_1978
Date Posted: 05/Dec/2007 at 4:18pm

In my opinion, it's going to be worth holding for many more years through ups & downs.
=================================================

Hence one can add more at current price ???

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happy & wise investing

Posted By: kulman
Date Posted: 05/Dec/2007 at 5:46pm

Yes, if steady compounding over long-term is in view.

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Life can only be understood backwards—but it must be lived forwards

Posted By: deveshkayal
Date Posted: 10/Dec/2007 at 3:21pm

http://www.livemint.com/2007/12/09171706/IDFC-PE-to-raise-600-million.html?atype=tp - IDFC PE to raise $600 million in third fund by March 2008

With the proposed $600 million fund, total funds raised by IDFC PE till date stand at $1.2 billion

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: kulman
Date Posted: 19/Dec/2007 at 9:58pm

IDFC Private Equity plans to invest around 25% of the corpus raised via its third fund in fast growing segments like power, transport, urban infrastructure and education.

But the challenge will be to find something of size in this space.

The new fund will make IDFC PE one of the largest Indian funds after ICICI Venture ($2.5 billion under management).

Apart from high valuations, there is also a worry that too much money is flowing in too fast. Valuations of both listed and unlisted companies are at an all-time high.

To date, PE investments have been giving returns of at least 30%. However, industry experts feel if one is comfortable with 10-15% returns in the current scenario, one could see more deals happening

http://economictimes.indiatimes.com/IDFC_Private_to_invest_25_of_its_funds_in_fast-growing_sectors/articleshow/2632655.cms - IDFC Private to invest 25% of its funds in fast-growing sectors

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Life can only be understood backwards—but it must be lived forwards

Posted By: chic_1978
Date Posted: 14/Jan/2008 at 5:48pm

Infrastructure Development Finance Company net profit rises 72.53% in December 2007 quarter

Sales rise 78.33% to Rs 688.82 crore

Net profit of Infrastructure Development Finance Company rose 72.53% to Rs 198.67 crore in the quarter ended December 2007 as against Rs 115.15 crore during the previous quarter ended December 2006. Sales rose 78.33% to Rs 688.82 crore in the quarter ended December 2007 as against Rs 386.26 crore during the previous quarter ended December 2006.

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happy & wise investing

Posted By: basant
Date Posted: 14/Jan/2008 at 5:58pm

Great going for this company. they have a well diversified business model and should be an attractive buy for investors seeking stable returns.

Posted By: basant
Date Posted: 15/Jan/2008 at 7:07am

http://www.theequitydesk.com/forum/forum_posts.asp?TID=224 - IDFC replaces Fin Tech in TheEquityDesk XI

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: tigershark
Date Posted: 11/Feb/2008 at 10:35pm

at 188 has this company become a little more valuable than it was at 235.considering the fact that india shall grow at lets say 8.5%of gdp, and sski being linked with capital mkts.

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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things

Posted By: gopal
Date Posted: 24/Feb/2008 at 7:50pm

Just 1 querry ..... why is not IDFC opening bank branches .... will that not help it to increase its value

ie ICICI, HDFC, IDBI, UTI, etc were also just term lending institutions but now all of them have bank branches also ....

thnx

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Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful

Posted By: basant
Date Posted: 24/Feb/2008 at 8:17pm

IDFC is not a bank and does wholesale term lending that means it does not cater to retail clients but just to large borowers so having 0 branches in one city serves no additional purpose.

Posted By: gopal
Date Posted: 24/Feb/2008 at 9:02pm

Basantji,

I was just thinking .... I read that IDBI was also a big term lender but now it has many bank branches also.

So does IDFC have any plans to open bank branches also.

thnx

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Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful

Posted By: Mohan
Date Posted: 24/Feb/2008 at 8:20am

Gopal,

IDFC is not yet a Bank. Infrastructure Development Finance Corporation ( IDFC ) has been created with a mandate to finance Infrastructure Projects by the Govt. Maybe, If it merges with a Bank, it can open branches and function as a Bank.

IDBI merged with IDBI Bank and is now a bank. ICICI merged with ICICI Bank and is now a bank too.

On the other hand , HDFC is a seperate entity from HDFC Bank , so is UTI seperate from UTI Bank, now renamed Axis Bank.

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Be fearful when others are greedy and be greedy when others are fearful.

Posted By: kulman
Date Posted: 07/Mar/2008 at 4:54pm

http://www.bseindia.com/qresann/news.asp?newsid=%7b1EF7C6B5-4A70-4A5D-AA60-15D84423C527%7d - IDFC - Acquisition of Standard Chartered Asset Management Company Pvt Ltd & Standard Chartered Trustee Company Pvt Ltd by IDFC

IDFC and Standard Chartered PLC on March 07, 2008 have entered into an agreement whereby IDFC has agreed to acquire 100% equity share capital of Standard Chartered Asset Management Company Pvt Ltd (SCAMC) and Standard Chartered Trustee Company Pvt Ltd (SCTCPL). SCAMC and SCTCPL represent the mutual fund business of Standard Chartered PLC in India.

In this regard the Company has issued the following Press Release:

"Standard Chartered PLC announced that it has agreed to sell Standard Chartered Trustee Company Pvt Ltd and Standard Chartered Asset Management Company Pvt Ltd, including minorities to Infrastructure Development Finance Company Ltd (IDFC) for a total cash consideration of approximately USD 205 million. The consideration is before deductions for local taxes and deal expenses.

The Companies mentioned above represent the mutual fund manufacturing business of Standard Chartered in India. The transaction does not include Standard Chartered a mutual fund distribution business which Standard Chartered will continue to pursue.

Jaspal Bindra, Chief Executive Office, Asia said, "IDFC is a well respected financial services Company and we are delighted to have reached an agreement with them for the sale of this business. Standard Chartered will remain a distributor of asset management products in India. India is a key market and delivered record results in 2007."

Dr. Rajiv Lall, Managing Director and Chief Executive Officers of the Company said, "We are pleased to acquire a quality asset management platform. This is in line with our wider strategy of broadening our footprint in the asset management business and diversifying our fee-based revenue streams".

This transactions is subject to certain regulatory approvals and other closing conditions and is expected to complete in the second quarter of 2008."

Right step at a bit expensive valuation.

http://www.bseindia.com/qresann/news.asp?newsid=%7b1EF7C6B5-4A70-4A5D-AA60-15D84423C527%7d -

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Life can only be understood backwards—but it must be lived forwards

Posted By: tigershark
Date Posted: 07/Mar/2008 at 8:01pm

800 crs is being invested in this aquisition bcos they feel the future for that particular industry is bright but the mkt is suggesting something else who will be right only time will tell

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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things

Posted By: deveshkayal
Date Posted: 07/Mar/2008 at 10:04pm

6% of AUM is not expensive.No doubt debt portion is greater in this case. What matters is how one scale it up. Its a great deal for IDFC.

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: tigershark
Date Posted: 08/Mar/2008 at 1:11pm

everything is ok for idfc expect that pe of 36 for fy 08

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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things

Posted By: nitin_jagtap
Date Posted: 08/Mar/2008 at 1:20pm

First SSKI and now Stanchart, they were also bidding for IFCI ..if same thing continues ....we many have to rename it to Investment Development and Finance Corporation

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Warm REgards
Nitin Jagtap

Posted By: kulman
Date Posted: 08/Mar/2008 at 1:45pm

Originally posted by nitin_jagtap

First SSKI and now Stanchart, they were also bidding for IFCI ..if same thing continues ....we many have to rename it to Investment Development and Finance Corporation

ha ha ha

Sir...it is better than IDBI: Instant Death By Investment.

Disclaimer: This is an act of plagiarism on my behalf.

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Life can only be understood backwards—but it must be lived forwards

Posted By: kulman
Date Posted: 10/Mar/2008 at 5:35pm

Standard Chartered Bank finally managed to get rid of its mutual fund business, after more than a year-long effort. Infrastructure Development Finance Company (IDFC) appears to have closed the deal at a reported $205 million or close to Rs 800 crore. This is around 5.7% of assets under management (AUM). While StanChart may choose to exit, the fact remains that the Indian market is an attractive place for MF business.

The equity capital invested in StanChart MF is around Rs 22 crore, according to its March 2006 annual report. So this has appreciated around 36 times.

UTI MF, which reportedly has a valuation of around Rs 7,000 crore, has an equity capital of Rs 50 crore. So clearly, http://economictimes.indiatimes.com/Market_News/AMC_business_to_see_value_creation/articleshow/2850861.cms - there is a lot of value creation going on, in the AMC business .

That is why new entrants continue to line up. In recent months, AIG and Mirae have entered the Indian markets, while Schroders is in the process of setting up an India office. There are many Indian outfits with fund management aspirations as well.

One set of players, who have missed the mutual fund party so far, is PSU banks and smaller private banks. The current bull run was an excellent time for them to build a substantial business quickly. Now, with the bull run more or less over, they may well have to wait for the next bull cycle to build scale, even if they do enter now.

Let’s check the IDFC transaction again. What IDFC gets immediately is a profit-making, mid-size MF business. The acquisition also takes IDFC one step forward to becoming an integrated financial house. IDFC, apart from its main mandate of infrastructure lending and advice, has a substantial PE business and an institutional broking arm. What perhaps remains for IDFC now is insurance and a commercial banking business. Both are substantial gaps, but already, IDFC ranks way ahead of all PSU banks other than SBI in market cap. It has almost caught up with Kotak Bank. Its price-to- earnings (PE) ratio is above 30, and comparable to banks like ICICI, HDFC Bank and Axis Bank.

IDFC’s rapid progress in the market cap sweepstakes underscores the need for most of these PSU banks to diversify into more profitable and valuable areas of the finance business.

The idea is that at least 25% of m-cap of a bank should come from non-banking activities like investment banking and broking, insurance and asset management. The higher this figure, better the m-cap and ratios like PE and price to book.

A recent report by ICICI Securities placed the value of non-lending businesses by IDFC at almost 20% of its current m-cap.

That is over Rs 4,500 crore, or almost equal to the m-cap of the likes of Syndicate Bank and Corporation Bank, and more than Central Bank, Vijaya Bank and Dena Bank. Perhaps, IDFC will acquire one or more of these in the days to come.

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Life can only be understood backwards—but it must be lived forwards

Posted By: tigershark
Date Posted: 10/Mar/2008 at 8:45pm

a step in the right direction,apeears that retained profits are being deployed to increase return on equity and roa in the long run

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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things

Posted By: deveshkayal
Date Posted: 10/Mar/2008 at 8:58pm

IDFC-SSKI is one of the lead managers to the Gammon issue. Hope the issue get over-subscribed (in the interest of IDFC shareholders)

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: chic_1978
Date Posted: 14/Mar/2008 at 5:00pm

Basantjee & other members.

This stock is considered a gold mine by many ...

Why is this stock hammered offlate...they are not into banking..nor do they hv forex exposures ?

Is it a best buy at current market price ???

Pls advice.

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happy & wise investing

Posted By: nitin_jagtap
Date Posted: 14/Mar/2008 at 5:28pm

One reason could be that they have a good broking business ...IDFC - SSKI ...we all know what has happened to brokerage stocks.

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Warm REgards
Nitin Jagtap

Posted By: tigershark
Date Posted: 14/Mar/2008 at 10:15pm

idfc -sski is an institutional brkerage, infact their workload might have increased from jan to now

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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things

Posted By: chic_1978
Date Posted: 15/Mar/2008 at 3:46pm

thats interesting.....

then wot cud b the reason.....or its a good buy ??????/

===========================================

idfc -sski is an institutional brkerage, infact their workload might have increased from jan to now

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happy & wise investing

Posted By: xbox
Date Posted: 15/Mar/2008 at 4:13pm

SumOfPartsValuation are invention of bull market only.

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Don't bet on pig after all bull & bear in circle.

Posted By: tigershark
Date Posted: 15/Mar/2008 at 8:35pm

mr lall in an interview on bs has said we will have an roe of 20% otherwise why should investors look at us.interview was 2 days back

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understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things

Posted By: basant
Date Posted: 15/Mar/2008 at 9:02pm

Any links?

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: kulman
Date Posted: 15/Mar/2008 at 9:21pm

http://www.business-standard.com/common/news_article.php?leftnm=lmnu4&subLeft=3&autono=316737&tab=r - Managing Director and CEO Rajiv B Lall tells that with the pressure on spreads bound to get worse, it’s necessary to have a strong fee-based business.

Why are you getting into the retail asset management space?
It’s the third piece of the assets under management (AUM ) strategy together with private equity and structured equity. Every one of the AMCs today has an infrastructure scheme in the listed space because infrastructure has become a significant part of the overall investible universe in the market. We found we couldn’t play that market and given our reputation and brand positioning in this space, we wanted to be here. If you build, it will take you 24 months to get there, because competition is very high. So we bid for Standard Chartered’s fund and now our suite will look different. The fees from AMCs can vary from 25-35 basis points to 1 per cent of the assets under management.

At 5.8 per cent of the AUM (you paid around Rs 800 crore for a book worth around Rs 14,000 crore), do you think you overpaid for the Standard Chartered fund?
Time will tell. If I were a private equity investor I wouldn’t have paid this price. But, as a strategic investor my calculation of the price is different, there is an acquisition premium built in. Our bet is that the team that comes with the acquisition combined with the IDFC brand name will allow us to expand assets aggressively to the point where we will make a decent return. In a strategic sense, it fills a gap in our offering.

IDFC is primarily a wholesale player, where does a retail business fit in?
I disagree with that. You may want to make unnecessary and meaningless distinctions between wholesale and retail but our analysis is that we are product manufacturers. It’s not that we have developed a retail distribution network. We will, for the time being, unless strategic reasons compel us to think otherwise, distribute our asset management product through a variety of open architecture distribution platforms. We’re not looking to build a retail distribution business but that might change. If we feel that we have an opportunity to build a platform that has synergies with the rest of what we’re doing, we’ll build it.

In India, mutual funds is a distribution game, not a product game.
That is a balance that will eventually be restored in our country. We shouldn’t lose sight of what the balance is in the rest of the world, we are in the very early stages. There’s a lot of hype around retail customers, it’s like you own so many eyeba*ls, so you get so much value. It’s not that simple. I think developing a retail distribution platform is an expensive proposition, I’m not sure we want to do that. Whether we want to build niche distribution to distribute our products, is something we will evaluate very carefully.
My own assessment is that there is a lot of potential in developing a bouquet of products that can be distributed through some kind of a truncated, a more modest and very focussed platform which, at the end of the day, is more wholesale in flavour. So, if we’re looking at platform that for distribution purposes relies more on institutional buyers as well as high net worth individuals, which includes corporate, then that would be very different from one that you would be building for a retail brokerage business.

What is IDFC’s business model?
The spreads on our lending business are continuously under pressure because of the competition. But we need to deliver stability and visibility to both the revenue and earnings streams. If we are simply an equity investor then the returns are lumpy. So we’re trying to strike a balance between those businesses that require more capital and which impact the return on equity and those that require less. We’ve decided to focus on investment banking and asset management; the former is more volatile but asset management is more stable. So, it’s strategically important for us to grow the asset management business to generate a revenue stream that consumes less capital, allows us to provide a valuable product and generates returns that are predictable.

So you plan to manage money across various asset classes?
We have two P/E funds with a total corpus of $650 million, which invest in companies that provide infrastructure services. That requires us to deliver higher returns which is why you get a 2 per cent fee and a 20 per cent share of the profits. We’re focussing very hard on this and we need to find talented management teams in whom we invest. That will generate value for us over time, most likely when those companies go public. In fact, we’re raising a third P/E fund.

How does the structured equity fund work?
The value proposition for the structured equity fund, which we’re doing with Citigroup and which again is third-party capital, is lower-risk but also lower-return. We invest in projects: for instance, we could pick up a 20 per cent stake in a road concession for 25-30 years. A portfolio of such projects will be created which will generate predictable cash flows. How this fund delivers a return is by aggregating a set of relatively stable cash flows into one vehicle that is taken public. So, the stretch of road doesn’t go public. If P/E funds need to deliver returns on equity of say 25 per cent or thereabouts, these funds will be expected to give say 700-800 basis points less.

How profitable will you be as a company?
Today, the ratio of interest to fee income is 50:50. But, the ratio will depend on our lending spreads. We should deliver a blended return on equity of about 20 per cent to shareholders, otherwise why should anyone want to invest in IDFC?

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Life can only be understood backwards—but it must be lived forwards

Posted By: shivkumar
Date Posted: 15/Mar/2008 at 11:20am

Been reading up on Future Capital and IDFC. How does one compare with the other? While IDFC is diversifying in to the mutual fund business following the acquisition of Stanchart's AMC, the former is aggressively moving into the funds business apart from retail lending.

Which of the two, do TEDdies think, will grow the fastest three or four years down the line?

Posted By: basant
Date Posted: 15/Mar/2008 at 11:35am

IDFC has the results behind it. FC is still getting its busienss plan in place.Management at FC is one of the best in the industry so it is a risk reward equation.

Posted By: kulman
Date Posted: 16/Mar/2008 at 4:54pm

http://www.topnews.in/edc-invest-50-million-idfc-infrastructure-fund-225899 -

Export Development Canada http://www.topnews.in/edc-invest-50-million-idfc-infrastructure-fund-225899 - to provide Canadian companies with new opportunities to participate in major projects in the booming Indian market.

The fund will be managed by IDFC Project Equity Company Limited, a wholly owned subsidiary of Infrastructure Development Finance Company Ltd (IDFC).

EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business.

The IDFC-sponsored India Infrastructure Fund will invest in infrastructure projects involving energy and utilities, transportation, telecommunications and social infrastructure in India.

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Life can only be understood backwards—but it must be lived forwards

Posted By: PrashantS
Date Posted: 16/Mar/2008 at 8:48pm

Future capital seems to be sleeping ..basantji i hope it is not like pantaloon industries..but i guess it is the market sentiment ...amazing thing is it has gone down with low volumes ...

Posted By: basant
Date Posted: 16/Mar/2008 at 9:06pm

sleeping or slipping!!!

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: statit0cream
Date Posted: 16/Mar/2008 at 11:20am

Prashant jee,

What does going down with low volumes signify ?

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You never know what you are up to , until you try.

Posted By: nitin_jagtap
Date Posted: 16/Mar/2008 at 11:24am

Going down with low volumes is not good sign for trading ..it means the sentiment is really bad and dull..people are able to buy stocks at higher spreads while sellers are also quite desperate to sell but not at any price. Broadly this is what it would imply.

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Warm REgards
Nitin Jagtap

Posted By: basant
Date Posted: 16/Mar/2008 at 11:27am

Normally it means that the selling is not serious but in these times you cannot apply those yardsticks. Buy stocks if you think that they confirm to valuations.

I have seen some stocks lose 50% on low volumes and then regain back their lost ground as well but at the end of the day they gain back only because the fundamentals were favourable.

Posted By: Vivek Sukhani
Date Posted: 17/Mar/2008 at 12:00pm

Originally posted by statit0cream

Prashant jee,

What does going down with low volumes signify ?

isko bola jata hai, dheere se jhatka jor se laga!!!!!!

Posted By: kulman
Date Posted: 17/Mar/2008 at 11:27am

Competition from an ex-employee...

Nasser Munjee, the person who set up one of India’s largest infrastructure funding agencies - IDFC - only to resign in a few years owing to differences between the management and stakeholders, is back to Infrastructure funding.

On Monday, Munjee along with ex-colleague Satish Mehta and Ajit Dayal of Quantum group launched a $500-million private equity fund, The Q India Fund, under the aegis of Quantum Equity Advisors, a firm owned by the trio.

The fund would invest in infrastructure related projects and companies. Munjee is the chairman of the venture, while Mehta is the managing director and chief executive. Both of them would lead the investment team.

“The fund would be predominantly international. A fund of this size takes around six months to close and the nature of the sector being such, we are looking only at long term investors and not those looking for overnight returns. We don’t have a set timeframe for deployment,” Mehta told DNA Money.

Over the next five years, about half-a-trillion dollars would need to be invested in infrastructure related projects In India, of which a third is expected to come from the private sector. It is this gap that private equity investors are looking to fund.

Mehta said an http://www.dnaindia.com/report.asp?newsid=1156567 - .

The fund, though, would steer clear of real estate projects and may invest in those with an infrastructure tag.

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Life can only be understood backwards—but it must be lived forwards

Posted By: Mohan
Date Posted: 17/Mar/2008 at 11:30am

Interesting piece of news.
BTW, Nasser is Chairman of DCB

Nasser Munjee returns to infra funding

Rabin Ghosh / DNA MONEY

Nasser Munjee, the person who set up one of India's largest infrastructure funding agencies - Infrastructure Development and Finance Corporation (IDFC) - only to resign in a few years owing to differences between the management and stakeholders, is back to Infrastructure funding.

On Monday, Munjee along with ex-colleague Satish Mehta and Ajit Dayal of Quantum group launched a $500-million private http://sify.com/finance/fullstory.php?id=14624057# - - equity fund, The Q India Fund, under the aegis of Quantum http://sify.com/finance/fullstory.php?id=14624057# - - Equity Advisors, a firm owned by the trio.

The fund would invest in infrastructure related projects and companies.

Munjee is the chairman of the venture, while Mehta is the managing director and chief executive. Both of them would lead the http://sify.com/finance/fullstory.php?id=14624057# - - investment team.

Munjee and Mehta were among the first lot of employees at the Housing Development Finance Corporation (HDFC), which was established in 1977. Both of them set up ventures promoted by HDFC — Munjee set up IDFC and Mehta the http://sify.com/finance/fullstory.php?id=14624057# - - Credit "The fund would be predominantly international. A fund of this size takes around six months to close and the nature of the sector being such, we are looking only at long term investors and not those looking for overnight returns. We don't have a set timeframe for deployment," Mehta told DNA Money.

Over the next five years, about half-a-trillion dollars would need to be invested in infrastructure related projects In India, of which a third is expected to come from the private sector. It is this gap that private equity investors are looking to fund.

Mehta said an internal rate of return, a key matrix to gauge a fund's efficiency, of mid-20s was achievable for infrastructure projects.

The fund, though, would steer clear of real estate projects and may invest in those with an infrastructure tag.

Under license from http://www.3dsyndication.com/ -

Posted By: kulman
Date Posted: 20/Mar/2008 at 7:07pm

IDFC has http://business-standard.com/common/news_article.php?autono=317437&leftnm=0&subLeft=0&chkFlg= - increased its stake in institutional brokerage house SSKI Securities by another 14 per cent to about 80 per cent , and plans to list it at a later stage.

A senior company official confirmed the development and said, “IDFC recently made an offer to the employees of the brokerage firm to buy their shares and the move is aimed at consolidating their holdings in the company. IDFC will look at unlocking the value of the company in the future by floating an initial public offering.” The rest 20 per cent stake is held by senior employees of SSKI.

In September 2006, IDFC acquired 33.33 per cent stake in SSKI Securities for Rs 100 crore, a privately held leading domestic mid-size investment bank and an institutional brokerage and research platform. In the middle of last year, it further increased its stake to 66 per cent by buying out the share held by founder Shirpal Morakhia.

“As the profitability of our pure lending business is under pressure, we need to aggressively develop our fee generating businesses, mainly asset management and investment banking,” said a senior IDFC official.

Early this month, IDFC acquired Standard Chartered’s asset management business in India for $205 million. In financial markets, the company is already into structure finance, debt syndication and private equity.

On its investment in SSKI, IDFC’s annual report said, “The SSKI investment is part of IDFC’s strategy to diversify its revenue base, increase fee-based revenue streams and participate in all aspects of the value chain for an infrastructure client. The SSKI platform is expected to enhance equity capital markets product offering for IDFC. Also, given the changing competitive landscape in the investment banking in India, there is an opportunity to build on the SSKI platform and develop a credible domestic investment banking franchise.”

SSKI’s corporate finance business is primarily focused on the infrastructure space. IDFC’s fee-based income has increased by almost 30 per cent from Rs 95.5 crore in 2005-06 to Rs 123.9 crore in 2006-07.

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Life can only be understood backwards—but it must be lived forwards

Posted By: rohitjairaj
Date Posted: 23/Mar/2008 at 6:59pm

At Rs 140, IDFC's PE stands at 30x FY08E earnings. The stock has been hammered in the past 2 weeks. I had initiated a position at Rs 190 and am considering acquiring a significant position now.

Given all the positive news and diversification of revenues to a more fee-based model, I was wondering if IDFC is a "good" financial play?

I would like to add a couple of points to all the analysis so far -

IDFC does seem to have competent top management with Mr Deepak Parekh and Dr Rajiv Lall. See their descriptions below:

Mr Parekh - the Non-executive Chairman of IDFC, is a Chartered Accountant by qualification and is a member of the Institute of Chartered Accountants, England and Wales. He is currently the Chairman of HDFC.

Dr Lall - the Managing Director and Chief Executive Officer of IDFC, is a graduate of Oxford University and has a doctorate in economics from the Columbia University, New York. Between 1995 and 2005, Dr. Lall was the executive director and the head, Asian economics research at Morgan Stanley, and Managing Director at Warburg Pincus in Hong Kong, Singapore and New York.

Should the above add some comfort to a shareholder?

Also, has anybody heard about SREI Infrastructure Finance? They are similar to IDFC but a lot smaller and primary focus is on Project Finance and Equipment Lending (what is this?).

They hold a 30% market share in equipment lending and have recently setup a JV with BNP Paribas in the space.

Posted By: basant
Date Posted: 23/Mar/2008 at 7:23pm

Withhout doubt the managment pedigree is unquestionable.

Posted By: gopal
Date Posted: 24/Mar/2008 at 5:31pm

how to open website of idfc ......

it closes the window itself if u try to open .... i just wanted to check there investor services segment

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Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful

Posted By: Mindlessthinker
Date Posted: 25/Mar/2008 at 5:56pm

http://www.moneycontrol.com/mccode/news/searchresult.php?search_str=Rajiv%20Lall&datesel=2">Rajiv Lall , CEO and MD of http://www.moneycontrol.com/india/stockpricequote/finance-term-lending-institutions/infrastructure-development-finance-company/11/15/IDF - IDFC , said 50% their revenues come from fee-based income, and 50% comes from non-fee based income. He said there is a good investment opportunity for IDFC's PE after the recent correction.

He doesn't see any any marked slowdown in infrastructure lending just yet. IDFC will look to deliver ROEs of over 20% over the long-term.

Excerpts of CNBC-TV18’s exclusive interview with Rajiv Lall:

Q: Your business model has been evolving over the last few months. Could you give us a sense of in the next one year, how much of your revenues would come from fee based income versus interest income?

A: It’s roughly now 50% share of total revenues, 50% comes from non-interest income and 50% from interest income. We are already going to achieve that this year.

Q: Do you see that proportion changing substantially as you look out one year, given the recent building blocks you have put in place?

A: No, this is probably around the right balance. It really depends on how quickly our balance sheet expands, which in itself is some function of the macro environment. So if the balance sheet growth slows down a bit, as one would expect it might, then the contribution or fee-based income to total revenues might remain the same or might even go up slightly next year.

Q: What exactly is the plan though for some of these entities. Firstly for SSKI, do you plan to open up the retail arm of it. Also for the Standard Chartered AMC, do you plan to rejig the kind of fixed and equity component there is right now for it?

A: I think it might be useful to step back a bit and share the overall perspective of why we are doing what we are. The way I like to describe is that we are trying to drive a car with four-wheels and the front wheel, or one of the front wheels, is really our lending business, which is a capital-intensive business, but a relatively low return on equity business.

The second wheel of the business is the principle investing business. We have been taking more direct and indirect exposure in quasi-debt or quasi-equity or straight equity products from our balance sheet. But the problem with that wheel is that the revenues it generates are lumpy and are not as transparent.

So we have turned to the third wheel, which is the IDFC-SSKI, which is investment banking, which is fee-based revenues. These do not consume a lot of capital and although they are high ROE businesses, they tend to be volatile earnings.

Therefore, the fourth wheel is very important for us. That’s the asset management wheel, which consumes less capital and delivers fee-based income that are very stable and more predictable.

So the acquisition of the Standard Chartered AMC business really needs to be seen in that wider context. If you have all the four-wheels running, then we believe we have a business model that consumes an appropriate amount of capital, is expected to generate a decent return on equity and some measure of stability in revenue streams and earning streams along with diversification.

Q: Three of those elements though are linked, if not closely then otherwise to the equity market. Do you see a significant change in performance for IDFC from here on?

A: In many senses everything is linked to the markets, that is inevitable in any financial services business. I don’t think that we are exceptionally linked to the performance of the equity markets because our investment banking business, for example, has many components to it, only one of which is equities business. We also have a fixed income focused investment banking business, which is the debt syndication business which has been growing quite rapidly. We have an advisory business, we have an equity placement business which in some sense is negatively co-related with the performance of the equity market as is the private equity business which is the part of the asset management business. So as equity markets softens, http://www.moneycontrol.com/mccode/news/article/news_article.php?autono=331342&special=today# -

Q: The exposure that you have taken on the IDFC balance sheet, whether equity, unlisted equity or debt, because of the turbulence in the market, do you see the possibility of marking down returns or taking any hits?

A: No, we have been very conservative in what we have done. The principal investing business, as I said, is very carefully calibrated. First of all, the allocation of capital to that business, from a risk perspective, is very tightly monitored.

Secondly, a lot of the exposure in principal investing is indirect, which means that we contribute to all our asset management businesses from the balance sheet. So it’s really an http://www.moneycontrol.com/mccode/news/article/news_article.php?autono=331342&special=today# -

We have a small prop book, which as you might expect, as opposed to delivering unrealized gains that were beginning to look quite obscene, is now looking more realistic but still quite healthy.

Q: There could be a potential slowdown in your lending balance sheet. Are you seeing a marked slowdown in the infrastructure lending business and people taking money to execute?

A: Not yet. We are not seeing that in our day-to-day business. But if one were to just look forward a little bit, I think psychologically, business wise, it’s time to take stock and see where the world is headed overall. If the equity markets have been shutdown, as they have, I imagine that a lot of clients in the infrastructure space are not going to be able to raise the easy capital that was required for financial closure.

If financial closures start getting delayed, I would imagine that there could be some delays in project implementation. If there are delays in project implementation, the body language of creditors becomes more cautious.

So all that will start adding up and the general tone of the market, I rather suspect, is for some kind of a modest slowdown.

Q: There were some disappointing loan growth figures out over the weekend. Specifically for infrastructure lending, what kind of tick do you think it can hold for this year?

A: For this year there is just too much momentum already built into the balance sheet, so I don’t think you will any material impact, at least not in our balance sheet for this fiscal year. For the next fiscal year, given what’s happening in the rest of the market, macroeconomics generally, this is probably a good year to focus more on higher quality credits and on consolidating of business then focusing just on great net growth.

Q: In your conversations with your clients on the infrastructure front, are you sensing that they are just getting into a bit of a shell after what’s happened in the last three-four months, a little bit more apprehensive with their execution, layouts and plans?

A: Not yet. At least they are not verbalizing it. Again, if I were to prognosticate, I would say that it takes a little time for people to accept that the world has changed. For behaviour to adjust accordingly, it will take another quarter I imagine.

Q: Because of the variable return on equities that you have in many of your different legs, what do you think you can deliver in terms of a composite return on equity by the time most of your business is stabilized, say at the end of FY09?

A: By the end of FY09, I think we will still be a work in progress. But I have always maintained that unless a platform like IDFC cannot deliver or is not able to deliver ROE in the range of 20% plus, we will not be doing our job long-term. So, we need to set the bar higher and work diligently towards that. I hope that the composite balance business plans strategy, that we are now executing on, will get us there fairly soon.

Posted By: johnnybravo
Date Posted: 31/Mar/2008 at 11:28am

http://economictimes.indiatimes.com/News/News_By_Industry/Banking_Finance_/IDFC_to_alter_object_clause/articleshow/2914850.cms - IDFC to alter object clause

The new activities proposed in the clause include engaging in all infrastructure activities and developing and maintaining infrastructure projects.....

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shayad iska matlab yeh log bhi abhi infrastructure banayenge.

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Saab Moh Maya hai!

Posted By: deveshkayal
Date Posted: 01/Apr/2008 at 10:04am

Originally posted by deveshkayal

Basantji can you change the Title of this thread to "IDFC- India's own Macquarie ! "

"In the next two years, our aim is to be a financial conglomerate like Dexia of France (a world leader in public finance and financial services) and Macquarie of Australia "

Source: http://businesstoday.digitaltoday.in/index.php?option=com_content&Itemid=1&task=view&id=4413&sectionid=24&issueid=24&latn=2 - Business Today

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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett

Posted By: kulman
Date Posted: 06/Apr/2008 at 12:03pm

IDFC PE today said it has pumped in Rs 40 crore in Emergent Ventures India, a carbon credit http://economictimes.indiatimes.com/articleshow/2930820.cms# - "We have been actively exploring investment opportunities http://economictimes.indiatimes.com/articleshow/2930820.cms# -

The investment made by IDFC PE would be utilised to enhance Emergent Ventures' existing businesses in South and South-east Asia

Emergent Ventures provides solutions under the UN Clean Development Mechanism programme, which range from project origination to assistance with project implementation and the monitoring or delivery of certified and voluntary emission receipts in the domestic and international carbon market.

Last year, IDFC PE invested $100 million in PV Technologies and Rs 350 million in Doshion, a water management company and Gujarat State Petronet.

Link: http://economictimes.indiatimes.com/articleshow/2930820.cms - ET

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Life can only be understood backwards—but it must be lived forwards

Posted By: rohitjairaj
Date Posted: 10/Apr/2008 at 8:26pm

Any idea when the next set of results are to be announced?

Also, where can one find out such information? Indiaearnings.com does not seem very helpful in this regard - it doesn't have a section on upcoming results announcements. Or maybe I am missing something?

Posted By: shivkumar
Date Posted: 16/Apr/2008 at 6:49pm

At today's closing price, IDFC is around 23 times FY 08's estimated earnings.

Does this constitute fair value?

Posted By: shivkumar
Date Posted: 16/Apr/2008 at 6:57pm

Originally posted by basant

IDFC is a financing agency. It does not go out and make those roads and dams etc. So if IDFC earns more then those pure infrstructure plays the latter would go bankrupt since infra players have to repay IDFC on interest and then make enough for themselves. SO while a Nagarjuna could go 3 times from here IDFC will grow slowly. The advantage is in durability. I think IDFC remains a good solid play on the Indian infrastructure boom.

Interesting comment from Basant thought more than a year old. But does it hold true now when IDFC has emerged as a major PE player holding shares in a number of unlisted ventures?

Posted By: basant
Date Posted: 16/Apr/2008 at 8:21pm

I forgot the context in which that comment was amde. Still the argument holds as it should just that holding stocks in companies would have to form a significant part of overall revenues to create that impact. PE players have the advantage of diversity unlike a pure road/bridge maker!

Posted By: smartcat
Date Posted: 29/Apr/2008 at 12:39pm

IDFC Standalone numbers…

Rs (m)	4QFY07	4QFY08	Change	FY07	FY08	Change
Interest income	4,058	6,753	66.4%	15,005	25,236	68.2%
Interest expended	2,660	4,446	67.1%	8,554	14,802	73.0%
Net Interest Income	1,398	2,307	65.0%	6,451	10,434	61.7%
Net interest margin				2.8%	2.9%
Other Income	45	70	55.6%	52	117	125.0%
Operating expense	194	387	99.5%	613	1,134	85.0%
Provisions and contingencies	158	398	151.9%	174	688	295.4%
Profit before tax	1,091	1,592	45.9%	5,716	8,729	52.7%
Tax	241	360	49.6%	1,087	2,039	87.6%
Effective tax rate	22.1%	22.6%		19.0%	23.4%
Profit after tax/ (loss)	850	1,232	44.9%	4,629	6,690	44.5%
Net profit margin (%)	21.0%	18.2%		30.9%	26.5%
No. of shares (m)				1,125	1,294
Book value per share (Rs)*					43.2
P/BV (x)					3.9

* (Book value as on 31st March 2008)

Source: Equitymaster.com

Posted By: basant
Date Posted: 29/Apr/2008 at 12:43pm

NBFC at 4 times book isn't costly and that is for standalone operations.Any idea why Provisions and other operating expenses have jumped up the way they have in relation to the revenue.

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