Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Asia Index Private Limited has announced the changes to the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> for the upcoming review in June. The rebalance will be effective from the open on 21 June and passive funds will need to trade at the close (VWAP over the last 30 minutes of trading) on 18 June.<a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN)</a> will be included in the index replacing <a href="https://www.smartkarma.com/entities/oil-natural-gas-corp-ltd" target="_blank" data-smartkarma-citation="entities:3456:1" rel="noopener">Oil &amp; Natural Gas Corp (ONGC IN)</a>.<a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a> was the highest ranking non-constituent but the Index Committee went with <a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN)</a> to reduce the underweight of the Materials sector in the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> vs the BSE All Cap index.<a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN)</a> was deleted from the <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">S&amp;P BSE SENSEX Index (SENSEX INDEX)</a> in December and makes its way back into the index after a big rally while out of the index.Passive funds will need to buy 0.33 days of ADV on <a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN)</a> and sell 1.63 days of ADV on <a href="https://www.smartkarma.com/entities/oil-natural-gas-corp-ltd" target="_blank" data-smartkarma-citation="entities:3456:1" rel="noopener">Oil &amp; Natural Gas Corp (ONGC IN)</a>. The actual impact will be higher since the delivery volumes on both stocks are much lower, especially on <a href="https://www.smartkarma.com/entities/tata-steel-ltd" target="_blank" data-smartkarma-citation="entities:20934:1" rel="noopener">Tata Steel Ltd (TATA IN)</a>.

Asia Index Private Limited has announced the changes to the S&amp;P BSE SENSEX Index (SENSEX INDEX) for the upcoming review in June. The rebalance will be effective from the open on 21 June and passive funds will need to trade at the close (VWAP over the last 30 minutes of trading) on 18 June.Tata Steel Ltd (TATA IN) will be included in the index replacing Oil &amp; Natural Gas Corp (ONGC IN).Wipro Ltd (WPRO IN) was the highest ranking non-constituent but the Index Committee went with Tata Steel Ltd (TATA IN) to reduce the underweight of the Materials sector in the S&amp;P BSE SENSEX Index (SENSEX INDEX) vs the BSE All Cap index.Tata Steel Ltd (TATA IN) was deleted from the S&amp;P BSE SENSEX Index (SENSEX INDEX) in December and makes its way back into the index after a big rally while out of the index.Passive funds will need to buy 0.33 days of ADV on Tata Steel Ltd (TATA IN) and sell 1.63 days of ADV on Oil &amp; Natural Gas Corp (ONGC IN). The actual impact will be higher since the delivery volumes on both stocks are much lower, especially on Tata Steel Ltd (TATA IN). 

Sensex Index Rebalance: Tata Steel IN, ONGC OUT

India Financials

Saumya Agarwal

Equity Bottom-Up

AU Small Finance Bank Limited / Equity Bottom-Up

AU Small Finance Bank, the largest Small Finance Bank in India by advances, has been putting up a tough fight in this pandemic. Collection trends have improved to more than 100% in Q4FY21, loan growth has picked up, and asset quality though stressed, is still manageable. The pandemic has been doubly challenging for Small Finance Banks, such as AU, given that they cater to small businesses and self-employed people. The unrelenting Covid wave is making it difficult for AU to sustain these improvements and stage a quick turnaround.

AU Small Finance Bank, the largest Small Finance Bank in India by advances, has been putting up a tough fight in this pandemic. Collection trends have improved to more than 100% in Q4FY21, loan growth has picked up, and asset quality though stressed, is still manageable. The pandemic has been doubly challenging for Small Finance Banks, such as AU, given that they cater to small businesses and self-employed people. The unrelenting Covid wave is making it difficult for AU to sustain these improvements and stage a quick turnaround. 

AU Small Finance Bank Q4FY21- Putting up a Tough Fight but Prolonged Covid Woes Clouding the Outlook

Thematic (Sector/Industry)

In quite an innovative move, the Government of India amended the Insolvency and Bankruptcy code (IBC) 2016, by promulgating an ordinance to provide pre-packaged resolution for micro, small and medium Enterprises (MSME’s). The move is expected to create a win-win situation for the MSME debtor and creditor alike. Banks with sizeable exposure to the MSME segment and/or  higher stress in the segment stand to benefit the most , from this amendment.

In quite an innovative move, the Government of India amended the Insolvency and Bankruptcy code (IBC) 2016, by promulgating an ordinance to provide pre-packaged resolution for micro, small and medium Enterprises (MSME’s). The move is expected to create a win-win situation for the MSME debtor and creditor alike. Banks with sizeable exposure to the MSME segment and/or  higher stress in the segment stand to benefit the most , from this amendment. 

The ‘Pre-Pack’ Scheme for MSME: Which Banks Have the Most Stressed MSME Portfolio ?

AU Small Finance Bank, with its focus on the low and middle-income population, is hopeful of a turnaround in asset quality despite catering to the micro and small businesses. The Bank has been steadily increasing the proportion of Retail AUM even as it is shrinking its small and mid- corporate portfolio. Can AU’s retail focused strategy hold it in good stead?

AU Small Finance Bank, with its focus on the low and middle-income population, is hopeful of a turnaround in asset quality despite catering to the micro and small businesses. The Bank has been steadily increasing the proportion of Retail AUM even as it is shrinking its small and mid- corporate portfolio. Can AU’s retail focused strategy hold it in good stead?

AU Small Finance Bank - Can AU’s Retail Strategy Hold It in Good Stead?

Equitas Small Finance Bank  / Equity Bottom-Up

Equitas Small Finance Bank (‘Equitas’) will be launching its IPO tomorrow i.e. on October 20, 2020. This would be the third IPO of a Small Finance Bank (SFB) in India, after that of AU Small Finance Bank and Ujjivan Small Finance Bank.The listing of Equitas (as well as other Small Finance Banks) is primarily driven by RBI regulations, which stipulate that Small Finance banks must list within 3 years of commencing operations. Equitas had commenced operations in 2016 and its listing has already been delayed, in part due to the Covid pandemic.Ahead of the IPO, we compare Equitas with its listed peers – AU and Ujjivan. How does Equitas compare with them on fundamentals and valuation.

Equitas Small Finance Bank (‘Equitas’) will be launching its IPO tomorrow i.e. on October 20, 2020. This would be the third IPO of a Small Finance Bank (SFB) in India, after that of AU Small Finance Bank and Ujjivan Small Finance Bank.The listing of Equitas (as well as other Small Finance Banks) is primarily driven by RBI regulations, which stipulate that Small Finance banks must list within 3 years of commencing operations. Equitas had commenced operations in 2016 and its listing has already been delayed, in part due to the Covid pandemic.Ahead of the IPO, we compare Equitas with its listed peers – AU and Ujjivan. How does Equitas compare with them on fundamentals and valuation. 

Equitas Small Finance Bank:  How Does It Compare with Its Listed Peers?

India

AU Small Finance Bank Limited operates as a commercial bank. The Bank offers financial products and services such as savings and current accounts, term deposits, debit cards, insurance, government banking, retail loans, and microfinance lending. AU Small Finance Bank serves customers in India.

AU Small Finance Bank Limited (AUBANK IN)

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AU Small Finance Bank Limited (AUBANK IN)

Sensex Index Rebalance: Tata Steel IN, ONGC OUT

Tata Steel will replace ONGC in the Sensex after the close of trading on 18 June. Tata Steel is back in the index after a 6 month break. Rebalance...

Brian Freitas

AU Small Finance Bank Q4FY21- Putting up a Tough Fight but Prolonged Covid Woes Clouding the Outlook

AU Small Finance Bank has been putting up a tough fight in this pandemic, but should the pandemic continue unabated , it could derail its efforts.

Saumya Agarwal

The ‘Pre-Pack’ Scheme for MSME: Which Banks Have the Most Stressed MSME Portfolio ?

The Government has amended the IBC code 2016 to provide pre-packaged resolution for MSME's. Banks with sizeable exposure to MSME and /or the...

Saumya Agarwal

AU Small Finance Bank - Can AU’s Retail Strategy Hold It in Good Stead?

AU Small Finance Bank is hopeful of a turnaround in asset quality, despite its focus on the small-ticket size Retail loans. Can AU’s retail focused...

Saumya Agarwal

Equitas Small Finance Bank: How Does It Compare with Its Listed Peers?

Ahead of the IPO of Equitas Small Finance Bank (‘Equitas’) , we compare it with its listed peers - AU Small Finance Bank and Ujjivan Small...

Saumya Agarwal

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52-week Range

Market Cap (USDm)

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