India focused Portfolio Advisory - Exp of 40+years, Das Capital Management and Advisors

Arun Thirumalai

India focused Portfolio Advisory - Exp of 40+years

Das Capital Management and Advisors

Das Capital is a research boutique with an aim to continuously map and plan the investment needs of investors focused on India. We have a six member research team with a combined experience of over 40 years as a part of our investment wing. Our team assisted in the setup of Premji Investments, which was one of India’s first family offices focused to managing Mr.Azim Premji personal wealth. We also serve as a research team to two Indian private equity energy funds “Small is Beautiful” and “KSK Emerging India Energy Fund”.

Equity Bottom-Up

Mr. Hemindra Hazari has recently written an excellent note on corporate governance credibility in  <a href="https://www.smartkarma.com/insights/axis-bank-crisis-of-credibility" target="_blank" data-smartkarma-citation="insights:10479">Axis Bank - Crisis of Credibility</a> which brought about corporate governance issues regarding NPA recognitions with respect to a recent RBI audit on all the major banks in India.<a href="https://www.smartkarma.com/entities/767" target="_blank" data-smartkarma-citation="entities:767">Yes Bank Ltd (YES IN)</a> , the fifth largest private bank in the country has reported much bigger divergence than Axis bank in its recently released FY17 financial statements. As per the annual report, the divergence is 6.6x…

Mr. Hemindra Hazari has recently written an excellent note on corporate governance credibility in  Axis Bank - Crisis of Credibility which brought about corporate governance issues regarding NPA recognitions with respect to a recent RBI audit on all the major banks in India.Yes Bank Ltd (YES IN) , the fifth largest private bank in the country has reported much bigger divergence than Axis bank in its recently released FY17 financial statements. As per the annual report, the divergence is 6.6x…

Yes Bank's NPA Divergence- An Encore on Axis Bank

Specialist in Indian Banking and Economic Research

Hemindra Hazari

IndusInd Bank’s quarter ended March 31, 2017 (4QFY2017) was impacted by a “one-off” exposure to a company whose cement operations is in the process of being acquired by a top-rated company. While sell-side analysts regard it as a blip in the secular positive outlook on the bank, they are failing to appreciate that such a transaction is a reflection on the bank’s corporate credit underwriting and risk management. The obsession to report higher fees to command premium stock market valuation may be compelling banks to undertake such transactions which prudent banks may not consider. IndusInd Bank’s premium valuation currently reflects its superior asset quality and earnings growth but in the light of this disclosure, investors may need to reexamine the bank’s risk appetite.

IndusInd Bank’s quarter ended March 31, 2017 (4QFY2017) was impacted by a “one-off” exposure to a company whose cement operations is in the process of being acquired by a top-rated company. While sell-side analysts regard it as a blip in the secular positive outlook on the bank, they are failing to appreciate that such a transaction is a reflection on the bank’s corporate credit underwriting and risk management. The obsession to report higher fees to command premium stock market valuation may be compelling banks to undertake such transactions which prudent banks may not consider. IndusInd Bank’s premium valuation currently reflects its superior asset quality and earnings growth but in the light of this disclosure, investors may need to reexamine the bank’s risk appetite.

IndusInd Bank - Is the One-Off Exposure a Reflection of Its Risk Managment?

Uday Kotak’s much-hyped press conference on March 29, 2017 ended with a whimper with his announcement of a new digital-based saving account which he believes would double the bank’s customer base (presently 8mn) in 18 months. Prior to the press conference, business TV, had been giving Kotak Mahindra Bank (KMB) free publicity by providing its viewership a countdown to the event throughout the day, in the expectation of a major merger and acquisition announcement by KMB. To say that Uday Kotak made no such announcement is an understatement.The press conference highlighted the need for the bank to further boost its market capitalization as an equity issue was announced the following day and the need for Uday Kotak to part divest his holdings to meet regulatory timelines. By permitting Uday Kotak to have a higher stake in the bank than its norms, the regulator has given him significant excess monetary gains at the cost to the bank’s non-promoter shareholders. The Rs40bn (US$616mn) gains estimated is as of March 31, 2017 and if the share price continues to rise till FY2020, the gains to the promoter will be even higher.

Uday Kotak’s much-hyped press conference on March 29, 2017 ended with a whimper with his announcement of a new digital-based saving account which he believes would double the bank’s customer base (presently 8mn) in 18 months. Prior to the press conference, business TV, had been giving Kotak Mahindra Bank (KMB) free publicity by providing its viewership a countdown to the event throughout the day, in the expectation of a major merger and acquisition announcement by KMB. To say that Uday Kotak made no such announcement is an understatement.The press conference highlighted the need for the bank to further boost its market capitalization as an equity issue was announced the following day and the need for Uday Kotak to part divest his holdings to meet regulatory timelines. By permitting Uday Kotak to have a higher stake in the bank than its norms, the regulator has given him significant excess monetary gains at the cost to the bank’s non-promoter shareholders. The Rs40bn (US$616mn) gains estimated is as of March 31, 2017 and if the share price continues to rise till FY2020, the gains to the promoter will be even higher.

Kotak Mahindra Bank - US$616mn Forbearance

Thematic (Sector/Industry)

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the capital market.  The cause for concern is the BJP’s promise to the UP electorate to waive off all farm loans and provide fresh loans at zero per cent interest. Media, capital market analysts and prominent bankers have jumped on the bandwagon of moral hazard, ruining the loan payment discipline amongst farmers and apprehensions that the sacrosanct fiscal deficit may be breached as a consequence of such ‘populist’ policies. The BJP electoral promise raises some issues which need to be explored further on whether the central government has the fiscal space to provide for a total farm waiver and whether the criticism of moral hazard is credible.

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the capital market.  The cause for concern is the BJP’s promise to the UP electorate to waive off all farm loans and provide fresh loans at zero per cent interest. Media, capital market analysts and prominent bankers have jumped on the bandwagon of moral hazard, ruining the loan payment discipline amongst farmers and apprehensions that the sacrosanct fiscal deficit may be breached as a consequence of such ‘populist’ policies. The BJP electoral promise raises some issues which need to be explored further on whether the central government has the fiscal space to provide for a total farm waiver and whether the criticism of moral hazard is credible.

U.P. Loan Waiver: 'Populist' or a Necessity?

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this win to ease Modi's chances for another term at national elections in 2019 and that would give him total 7 year period to push for reforms (In his victory speech Modi himself said he is now looking for delivering by 2022 - the 75th year of Indian Independence). Amidst the euphoria of Modi's victory, we would like to highlight some of the ground realities…

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this win to ease Modi's chances for another term at national elections in 2019 and that would give him total 7 year period to push for reforms (In his victory speech Modi himself said he is now looking for delivering by 2022 - the 75th year of Indian Independence). Amidst the euphoria of Modi's victory, we would like to highlight some of the ground realities…

Investors Need To Be Patient With Reform Momentum Even As Modi Win Ensures Policy Continuity

India

YES BANK Limited provides banking services. The Bank offers deposits, personal loans, e-banking, trade finance, corporate, and business banking services. YES BANK serves the food and agribusiness, life sciences, healthcare, biotechnology, telecommunications, media, information technology, and infrastructure development industries in India.

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Yes Bank (YES IN)

Yes Bank's NPA Divergence- An Encore on Axis Bank

Mr. Hemindra Hazari has recently written an excellent note on corporate governance credibility in Axis Bank - Crisis of Credibility which brought...

Das Capital Management and Advisors

IndusInd Bank - Is the One-Off Exposure a Reflection of Its Risk Managment?

IndusInd Bank’s quarter ended March 31, 2017 (4QFY2017) was impacted by a “one-off” exposure to a company whose cement operations is in the process...

Hemindra Hazari

Kotak Mahindra Bank - US$616mn Forbearance

Uday Kotak’s much-hyped press conference on March 29, 2017 ended with a whimper with his announcement of a new digital-based saving account which...

Hemindra Hazari

U.P. Loan Waiver: 'Populist' or a Necessity?

Post the Bharatiya Janata Party’s (BJP) decisive victory in the Uttar Pradesh (UP) state elections, alarm bells have commenced tolling in the...

Hemindra Hazari

Investors Need To Be Patient With Reform Momentum Even As Modi Win Ensures Policy Continuity

Expectations on economic reforms from Modi government are running high after the big win in Uttar Pradesh. Political analysts are expecting this...

Asia Advisors

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