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Topic: IDBI: Enough Margin of safety

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BubbleVision
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Posted: 26/Jan/2007 at 11:19pm

Additionally Kulman...markets generally have different ways of interpretting logic....

Expect the unexpected!

You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!

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kulman
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Posted: 26/Jan/2007 at 11:28pm

You said 'logic'!? What's that?

Ask any Mungerilal........he would confirm that markets always behave illogically & irrationally!!

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

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vivek.650
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Posted: 22/Jun/2007 at 6:14pm

IDBI is the best MIDCAP PSU bank. Technologically its much more advanced than other PSU banks. The work culture in this Bank is very good and Bank is doing very well on service parameters. The management has taken lot of initiatives to ensure that the Bank size grows without compromising on asset quality. It’s also concentrating on CASA accounts. The bank is bound to grow and this bank has good quality asset. This Bank book value is 95 Rs and this is trading at 1.07 FY08 Book Value which is very cheap for such a large Bank. It is estimated that the Bank is sitting on good amount of Real Estate at Chennai & various other places whose cost at current market price is 3200-3500 crore. The same has not been revalued on the Balance Sheet. The Bank is best prepared to face Basel II norms. In the PSU Banking sector this is the most undervalued stock. I see the stock matching Bank of India in the near future. Technology vendors like Oracle, i-flex, Infosys rate this Bank as the best PSU Bank in the context of Technology initiatives taken by this Bank. With its massive reach this would give necessary boost to the profits. Any more discussion on IDBI is welcome.Thanks.

vivek

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vivek.650
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Posted: 02/Jul/2007 at 2:06pm

Since then,IDBI is appreciated 20 percent . Any say. I feel it should do well in comming days.Thanks.

vivek

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xbox
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Joined: 10/Sep/2006
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Posted: 02/Jul/2007 at 2:09pm

I think, it will actively participate in consolidation of PSU banks.

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

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Mohan
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Posted: 07/Jul/2007 at 1:02am

IDBI's stake sale in NSE only a part of its treasure

2007-06-29 15:51:58 Source : Moneycontrol.com

Industrial Development Bank of India, IDBI has major investments in listed and unlisted companies in India. Yesterday IDBI sold 9 lakh equity shares constituting 2% of the issued and paid up capital of National Stock Exchange of India to MS Strategic (Mauritius) Ltd. for an aggregate sum of USD 50 million.

Even after selling 2% stake in the NSE for USD 50 million (around Rs 200 crore), the bank still has 11% stake (49.5 lakh shares) in NSE, which can be valued at around Rs 1100 crore, based on the above valuations.

Apart from that the bank has investments in SIDBI, NSDL, IFCI, IDFC, ARCIL and its subsidiaries, which are valued at nearly Rs 3772.8 crore.

According KR Choksey report, “The bank has substantial amount of investments in listed and unlisted equities of companies like in NSDL, SIDBI, IFCI, IDFC, ARCIL, NSE to name a few. Market value of few of these investments stands at Rs 3772.8 crore adding Rs 52.2 to the EPS of the bank.” The value of the bank will increase manifold once the bank starts booking profits from these investments.

Valuations of few of the important investments of IDBI

Investments of IDBI
Investments IDBI	Stake (%)	Basis of valuation	Total Value (Rs. cr)	Value per share
SIDBI	19.2	One time FY07 book value	1013.8	14
NSE	13	Recent stake sale in NSE by IFCI	1400	19.4
ARCIL	20	PE multiple of 4x FY07 EPS	29.6	0.4
IDFC *	3.1	Current market value	422.4	5.8
IFCI *	11.7	Current market value	370.8	5.1
Subsidiaries
IDBI Home	100	One time FY07 book value		5
IDBI Capital	100	One time FY07 book value		2.2
IDBI Intech	100	One time FY07 book value		0.1
IDBI Gilts	100	One time FY07 book value		0.1
Total			3772.8	52.2

Note: * Market price of IDFC and IFCI taken above for the calculation is Rs.121 and Rs.49.6 respectively as on June 21, 2007. (KR Choksey report)

Company Description

IDBI was set up as a non-banking institution to provide project finance. High funding costs and rising NPLs led to its operations becoming unviable. The government therefore restructured it by a) converting it into a bank b) transferring most of its NPLs to an SPV c) re-pricing its high cost liabilities and d) merging it with a private bank. IDBI is now the fifth largest bank in India, and poised to capitalize on strong growth opportunities in the Indian banking space.

IDBI's principal activities are to provide commercial banking services which include merchant banking, direct finance, infrastructure finance, rehabilitation assistance, venture capital fund, advisory, trusteeship, forex, treasury and other related financial services.

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

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xbox
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Posted: 07/Jul/2007 at 10:39am

Well!! If investment valuation is any criteria, SBI stands tallest of all.

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

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Mohan
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Location: United States
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Posted: 08/Jul/2007 at 7:25pm

Vipulji,

Please share with TED on SBI's investments valuations. Its the largest bank in the Public sector and I'm sure its stands head and shoulders above everyone else.

Thanks for bringing it up.

Edited by Mohan - 08/Jul/2007 at 9:55pm

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

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