IDFC Limited Analysis

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Ticker : 5326 / IDFC

ISIN : INE043D01016

 IDFC, A Public Finance Institution is among youngest in the peers. Though the concept is outdated and Others like ICICI and IDBI Change themselves into banks, IDFC is little Bit different. Even though the company received permission and the BANK come into existence, still IDFC is keeping its identity.

Industry Analysis : The Growth of NBFC sector is more with respect to Banks. As of March 2013, It is 12.5% Part of GDP. There are are many reasons for the growth. Low cost is one as there is no need to buy big amount of Funds and invest in Govt securities or kept in RBI. Whole sector is growing with the speed around 22% and all because of Players like Microfinance, the sector is tapping the untapped potential. But the most important thing is many NBFCs like IDFC are lending Big Infrastructure projects. From Listed like IDFC to Non Listed like IIFCL, India Infrastructure Finance Corporation Limited. The sector is big beneficiary of Financial inclusion as Mutual Fund, Brokerage Firm And Housing Finance companies also Come in NBFC. WHICH make this sector more attractive and so called proxy for India’s Growth. IDFC is Big name in the sector as it is Development Finance company AKA Govt arm to Finance Growth.

Company Analysis : Before the demerger the company was purely Finance Company with providing Advisory and Management service in Infrastructure sector. With it the company was also operating in Asset management, Brokerage and investment banking. All because of its 4*4 strategy, it was ‘One firm that looks After diverse needs of infrastructure development. Through its ten subsidiaries and three joint venture, it was doing its business. The concentration was on Transport, Telecommunications and IT, energy, Industry and commercial Infrastructure. There was four main products are project finance, Equity Finance, structure products and Investment advisory.

After the demerger the financing part is went to IDFC BANK so the big PART of company Topline was removed. Now IDFC is more or less Asset play and Holding company. You may compare it with HDFC but in Infrastructure. They have some very good and important product still today in there portfolio like private Equity, Mutual funds. The company also holds Stake in NSE and as I am writing this, NSE is planning to come with IPO so that will be big Value unlocking as right now it’s not listed and many of there assets are not listed so the value is uncertain for market. But still as my view, the company is looking good and available at very good Rate. The company is asset play. So just ignore the Results. Concentrate on News of NSE listing or anything. One more thing is as the RBI is thinking to abolish the Holding company structure, it may unlock value as market always Discount Holding companies.

SUBSIDIARIES..

IDFC private Equity
IDFC Trustee company limited
IDFC project Equity company limited
IDFC Finance limited
IDFC securities
IDFC PPP trusteeship company
IDFC projects limited
IDFC Asset Management Company
IDFC AMC Trustee

Joint Venture
Infrastructure development Corporation Karnataka
Uttaranchal Infrastructure development Corporation
Delhi integrated Multi Model Transit System

Before the demerger, Rajiv Lal was heading the company. After the demerger, Vinod Rai, formar CAG is Chairman of the company. As the company is Professionally managed and there is no clear promoter, Corporate Governance is better in the company.

SHAREHOLDING PATTERN

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Financials and Ratios 

 2015-16
Revenue225.88
Net Profit(1162.14
EPS(7.29)
Dividend per Share0
Dividend Payout0
Book Value60.15
ROE0
All The numbers are for after the demerger of IDFC bank
Future Prospectus.
All the subsidiaries have big potential in future. ASSET management business is specially important as In recent days Mutual funds are playing important role. As the Financial Education and awareness is increased amongst Youth it’s revenue is expected to grow. The similar with Hedge fund as the IDFC is also running Hedge Funds. India Infra fund, one important assets in hand of IDFC, having big potential. Another big asset will be Investment Banking. The growth of Corporate is impossible without Them and IDFC is premier name in the sector.
And IDFC bank. The way they are marketing themselves is different And attractive.
Still remember that during days of demerger, Many people were comparing it with HDFC. Yes there is potential as the Time HDFC received licence of Banking, the need for housing Finance was Big. Right now as India Need Infrastructure development, IDFC may proves itself as Another HDFC.

Update : As on 31 August, New norm to move stalled Infrastructure projects, Govt change and come up with new norms. Under it Govt will release 75% amount against margin free guarantee. The amount can be use to repay debt or other expenses related with project Which are awarded and are stalled.

It is big boost for Infrastructure. As IDFC is Big finance company in it is expected to receive big boost. Indirect beneficiary.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter

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