Best Value For Your Money from RamaKrishnaVadlamudi

Sunday, 23 April 2023

Short Notes on Bandhan Bank Stock - vrk100 - 23Apr2023

Short Notes on Bandhan Bank Stock

(Please look for P.S. dated 28Apr2023 at the end of this article)

(This is just for information purpose only; this should not be construed as investment advice though the author is a CFA Charterholder. Readers should consult their own investment advisor before making any investment decisions.)

I've been watching the business and stock market gyrations of Bandhan Bank Limited even since its initial public offering (IPO) on Indian bourses five years ago.

Its business has undergone various vicissitudes due to problems surrounding micro-finance in India, downturn in rural family incomes and regulatory issues. The fortunes of its business are reflected in its stock price volatility in the past five years. See the below table for events and volatility >

Bandhan Bank Limited at current market price of Rs 220 (market cap Rs 35,400 crore) is attractively priced in my opinion -- though there are concerns about its recovery in micro-finance sector and its volatile quarterly results.

Three weeks ago, its price was at a 50 percent discount to its IPO price of Rs 375 (the stock was listed on 27Mar2018). These are the difficult times for the stock at which time one should pick up the stock if investors are confident about the company, its promoters and its business model. Patience is needed with the stock.

Companies and / or banks go through tough times -- this is a feature, not a bug in free market economies (I mean relatively free markets). The promoters have a good track record in my opinion. All the worst opinions / views about the stock are priced in -- and I reckon any further downside from current price level is limited.

The bank is promoted by Chandra Shekhar Ghosh. The promoters' holding in the bank is a little less than 40 percent, foreign investors hold 32 percent, domestic financial institutions hold 13 percent and the rest is held by public.

One could check the valuation of the bank versus its peers in data websites. From screener.in and ticker.finology.in >

Non-performing asset (NPA) ratios are slightly higher for the bank compared to other comparable banks. I think the bank's troubles in recovery in North Eastern states will subside in the next one or two quarters. Loan growth has improved in recent quarters.

Bandhan Bank's business model is such that it was impacted more by issues in India's rural economy, like, the cash ban (demonetisation), IL&FS crisis and draconian COVID-19 lockdowns. The bank's exposure is more toward micro-finance.

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P.S.: 28Apr2023 Care Ratings - Care Edge report - Microfinance (MFI) industry beats COVID-19 blues, likely to grow by 25 percent in FY 2023-24

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References:

Tweet thread 27Mar2018

Tweet dated 27Mar2023

Tweet dated 23Apr2023

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Quarterly Data of Mutual Funds' Assets in India

JP Morgan Guide to Markets Mar2023

Brief Analysis of RP Sanjiv Goenka and RPG Enterprises Groups

The Scourge of Negative Real Interest Rates Continues

BSE 500 vs S&P 500 Indices Compare 31Mar2023

Nifty 50 Index Quarterly Movement 31Mar2023

Mutual Fund Asset Class Returns 31Mar2023

Global Market Data 31Mar2023

Understanding Corporate Debt Market Development Fund (CDMDF)

A Brief Outline of Dixon Technologies (India) Ltd

General Market Chatter

Negative Impact of Debt Mutual Fund Tax Changes

When Is The Next Buyback Offer Likely To Be?

Why Do Indian Equity Mutual Funds Always Disappoint Investors?

Weblinks and Investing

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Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.

CFA Charter credentials - CFA Member Profile

CFA Badge

He blogs at:

https://ramakrishnavadlamudi.blogspot.com/

https://www.scribd.com/vrk100

Twitter @vrk100

Friday, 21 April 2023

Quarterly Data of Mutual Funds' Assets in India - vrk100 - 21Apr2023

Quarterly Data of Mutual Funds' Assets in India

Follow @vrk100

(A new blog dated 18Jul2024 is available)

(Please check update 12May2023 at the end of the article; even though, the article was written on 21Apr2023, I've added a few updates at the end of this article with new data)

(Please check update 22Apr2023, at the end of this article, with new data of yearly growth rates for the past 22 years -- that is, since 2001)

In the past six to seven years, mutual fund industry in India has been able to grow their assets at a faster clip, though their return performance continues to disappoint the mutual fund unitholders.

But in financial year 2022-23, the growth of Indian MF industry slowed down to 4.9 percent (India's financial year starts in April and ends in March). The assets under management or AUM of all mutual funds (including equity, debt, hybrid, gold and others) has grown by 4.9 percent to Rs 39.42 lakh crore in FY 2022-23.

(the blog continues below)

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Related Blogs on Mutual Funds:

Mutual Fund Asset Class Returns 31Mar2023

Understanding Corporate Debt Market Development Fund (CDMDF)

Negative Impact of Debt Mutual Fund Tax Changes

EPFO Investments in Stocks Via ETFs

Why Do Indian Equity MFs Always Disappoint Investors?

Indian Mutual Funds and the Art of Ripping off Investors

Who is Eating My Gold ETF Return?

Mutual Fund Asset Class Returns 31Dec2022

Mutual Fund Asset Class Returns 30Jun2022

Mutual Fund Asset Class Returns 31Mar2022

Mutual Fund Asset Class Returns 31Dec2021

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Table showing data of mutual funds' AUM for the past five quarters and their growth rates >

The above table reveals:

-- only select mutual fund category data is shown here

-- total AUM data is for all categories of mutual funds in India

-- the biggest AUM growth rate categories (among select MF categories) in FY 2022-23 are: 1) gilt funds, 2) multi-asset allocation and 3) equity small-cap funds

-- multi-asset allocation are funds that invest in a variety of asset classes, like, equity, debt and gold

-- the biggest decrease in growth rates are in the following categories: 1) debt floater, 2) arbitrage and 3) debt banking & PSU funds

-- total AUM of MF industry grew by 4.9 percent to Rs 39.42 lakh crore

-- Value Research article dated 03Apr2023 reported record net inflows of about Rs 39,325 crore (image below) into debt mutual funds during the last week of March 2023

To Sum Up

The mutual fund industry has been facing a lot of challenges these days. The portfolio management services (PMS) industry is competing with mutual funds. The stock market has been moving in sideways in the past 18 months, dampening the sentiment of first time investors.

The enthusiasm of small and first-time investors too has tapered in the past one year due to lack of initial public offers and disappointment with recently listed IPOs in 2022.

The boost mutual funds got during the height of COVID-19 Pandemic has died down. In addition, the mutual fund industry has failed to generate superior returns to the unitholders / investors.

There are four listed asset management companies or AMCs from the mutual fund industry -- namely, Aditya Birla Sun Life AMC, HDFC AMC, Nippon Life India AMC and UTI AMC.

Even these listed AMC stocks have disappointed their shareholders, with their lacklustre performance -- their shares lost between 15 and 37 percent in the past one year.

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P.S. 3 dt 12May2023: Table showing monthly AUM data of mutual fund industry with latest data as of 31Apr2023 > the data are some select MF categories >

In Apr2023, there was significant growth in AUM of categories, like, liquid fund, Aggressive hybrid, debt - floater, equity flexi-, large-, mid- and small-cap funds >

P.S. 2: Last-minute tax changes to debt mutual funds taxation brought in by Gov't of India on 24Mar2023 will negatively impact inflows into debt mutual funds from 01Apr2023 onwards -- one more area of concern for the mutual fund industry in India

P.S. 1: Table showing yearly AUM data of mutual fund industry growth for the past 10 years >

-- FY 2022-23 experienced lowest growth of 4.9 percent in AUM in the past 10 years, except for COVID-19 year of 2019-20

-- FY 2016-17 and 2020-21 are the two highest growth rate years, with rates of 42.3% and 41.2% respectively, in the past 10 years

-- MF industry's assets grew by a phenomenal 462 percent in the past ten years (between 31Mar2013 and 31Mar2023)

-- the compounded annual growth rate (CAGR) is 18.8 percent in the past 10 years

The following table gives details of AUM of MF industry since 2000 and the year-over-year growth rates >

The AUM data as on 31Mar2003 did not include AUM of SUUTI of Rs 29,635 crore -- it may be noted erstwhile Unit Trust of India (UTI) was, in Feb2003, bifurcated into UTI MF and SUUTI (Specified Undertaking of UTI).

During the UPA Government (2004-2014), the compounded annual growth rate of MF industry was 19.44 percent -- with absolute growth of 491 percent between 31Mar2004 and 31Mar2014. Let us see whether the NDA Government under PM Modi will surpass the CAGR in their 10-year period to be completed by roughly 31Mar2024.

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References:

excel file: AMFI monthly data

data from AMFI monthly data

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JP Morgan Guide to Markets Mar2023

Brief Analysis of RP Sanjiv Goenka and RPG Enterprises Groups

The Scourge of Negative Real Interest Rates Continues

BSE 500 vs S&P 500 Indices Compare 31Mar2023

Nifty 50 Index Quarterly Movement 31Mar2023

Mutual Fund Asset Class Returns 31Mar2023

Global Market Data 31Mar2023

Understanding Corporate Debt Market Development Fund (CDMDF)

A Brief Outline of Dixon Technologies (India) Ltd

General Market Chatter

Negative Impact of Debt Mutual Fund Tax Changes

When Is The Next Buyback Offer Likely To Be?

Why Do Indian Equity Mutual Funds Always Disappoint Investors?

Weblinks and Investing

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

Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

CFA Charter credentials - CFA Member Profile

CFA Badge

He blogs at:

https://ramakrishnavadlamudi.blogspot.com/

https://www.scribd.com/vrk100

Twitter @vrk100

Monday, 17 April 2023

JP Morgan Guide to the Markets Mar2023 - vrk100 - 17Apr2023

JP Morgan Guide to the Markets Mar2023

Follow @vrk100

JP Morgan Asset Management publishes a comprehensive presentation every month end, containing various slides on global markets, especially those relating to the US markets.

(story continues below)

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Related Blogs:

JP Morgan Guide to Markets Jan2023

JP Morgan Guide to Markets Dec2022

JP Morgan Guide to Markets Oct2022

JP Morgan Guide to Markets Sep2022

JP Morgan Guide to Markets Jul2022

JP Morgan Guide to Markets Apr2022

JP Morgan Guide to Markets Jan2022

JP Morgan Guide to Markets Dec2021

JP Morgan Guide to Markets Nov2021

JP Morgan Guide to Markets Aug2021

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This is a very useful and informative guide for financial market professionals or FMPs. This "JP Morgan Guide to the Markets" can be accessed here. The following are some of the highlights / images presented in this guide: all the data are at the end of 31Mar2023: