IDFC Bank makes an Exchange Debut today listing at @ Rs 70 ~ What is the Worth ?

IDFC Bank makes an Exchange Debut on BSE today listing at @ Rs 70 & after a High of Rs 73.45 and a Low of Rs 67 closing too at @ Rs 70 with volumes of 4.3 million shares

What’s it Worth ?

Well the Market Cap is @ Rs 23876 crs at Rs 70.40 Share Price

Just to recall ~ IDFC received the RBI in-principle approval on April 9,2014 to set up a Bank in the Private Sector

It began the process to do so with the Scheme of Demerger being approved by the Madras High Court on June 25,2015 with every IDFc Shareholder getting 1 share in IDFC Bank for every share held in IDFC

IDFC Bank was incorporated on October 21,2014

It got listed today at @ Rs 70 with an Equity Capital of  Rs 3391.53 crs (FV Rs 10) and  Reserves of Rs 5289.60 crs ( largely Share Premium of Rs 5232.56 crs)

The Networth thus on listing is Rs 8681.13 crs computing to a Book Value of Rs 25.60 which at listing Price of @ Rs 70 gives a PBV of 2.73

IDFC Bank began on October 1,2015 with a loan book of Rs 46381 crs

The Capital Structure evolved   as below

CAPITAL STRUCTURE

Date

No of Shares Issued

Issue Price

(Rs )

Nature of Issue

Cumulative Share Capital

(Rs Crs)

Cumulative Share Premium

(Rs Crs)

October 21,2014

50000

10

MOA

5,00,000

July 7,2015

1,250,000,000

40

Rights to IDFC Financial Holding Co Ltd

12,500,500,000

3750

September 30,2015

547462668

37.08

“”””””””””

17,975,126,680

5233

October 9,2015

1594020668

Scheme of Demerger

33,915,333,360

Top 10 Shareholders as on October 27, 2015

Sr

Shareholder

No of Shares

Stake %

1

IDFC Financial Holding Company Limited and its nominees

1,797,512,668

53.00

2

President Of India

261,400,000

7.71

3

 Sipadan Investments (Mauritius) Limited

151,145,989

4.46

4

National Westminster Bank PLC as Depositary of First State Asia Pacific Leaders Fund a sub-fund of First State Investments ICVC

74,206,298

2.19

5

Actis Hawk Limited

37,091,569

1.09

6

Orbis Sicav – Asia Ex-Japan Equity Fund

34,396,487

1.01

7

CLSA global markets pte. Ltd.

27,530,245

0.81

8

First State Investments (Hong Kong) Limited A/C First State Asian Equity Plus Fund

21,771,232

0.64

9

Orbis Global Equity Fund Ltd

17,919,198

0.53

10

10 JP Morgan Sicav Investment Company (Mauritius) Limited

13,503,111

0.40

2,436,476,797

71.84

The Non Executive Chairman is Mr Anil Baijal while the MD & CEO is Dr Rajiv Lall who holds 1998984 shares in the Bank.Another IDFC Director Mr Vikram Limaye holds 2043728 shares
Here’s how the Peer Groups look on Market Cap & Price to Book

The Big Four Private Banks

HDFC Bank

ICICI Bank

Kotak Mahindra Bank

Axis Bank

Market Cap (Rs Crs)

272465

155126

120225

110620

Share Price (Rs) November 6,2015 Closing

1080

267

657

465

FY 15 Book Value

247

139

183

188

PBV

4.37

1.92

3.59

2.5

The Smaller Four Private Banks

IndusInd Bank

Yes Bank

IDFC Bank

IDBI Bank

Market Cap (Rs Crs)

54550

31785

23876

13570

Share Price (Rs) November 6,2015 Closing

921

758

70.40

84.60

FY 15 Book Value

193

280

25.60

141

PBV

4.8

2.7

2.75

0.60

IDBI Bank is plagued with high Gross & Net NPAs that have risen further to 6.92% and 3.16 % respectively on September 30,2015…explains why it’s available below Book
IDFC Bank begins with a relatively cleaner slate but is certainly not a bargain at PBV of 2.75,similar to closest Peer on the Market Cap upside,Yes Bank
However  as Top 10 Shareholders as above own @ 72% stake it does augur well on the bourses as floating stock will be restricted
Will be interesting to see if IDFC Bank overtakes Yes Bank in Market Cap which is 33% ahead as of date and plays catch up with IndusInd PBV Valuations
Now that would be really interesting !
Downside too is open if NPAs begin rearing some head on the loan book position of Rs 46381 crs taken over on October 1,2015 from IDFC
Will keep a watch on IDFC Bank
Cheers !

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