- Is the market overreacting to #HDFCBank?
- Why are FPIs dumping the stock?
Sajeet Manghat delves into the details.
- Why are FPIs dumping the stock?
Sajeet Manghat delves into the details.
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TVTranscript
00:00 You know, Vishy, the bank has been talking about that they don't want to go into wholesale
00:04 deposits and the reason being that the interest rate cycle is about to turn.
00:09 We heard yesterday Dinesh Khaira talking about that, you know, the first cut may happen between
00:15 October, December.
00:16 That means that they're going to go slow for the entire fiscal FY25.
00:22 And that also means that either they have to go for an equity raise or shore up their
00:26 capital so that they can meet the guidance of the growth, right?
00:30 Yeah, I mean, ideally, yes, because the only way to fund that kind of growth, Sajid, is
00:36 either through equity or through actual liquidity that is there in the banking system.
00:40 Now, if the liquidity is going to be tight for the time being, we don't, by the way,
00:45 do not know what is going to happen before the financial year ends because the budget
00:49 is coming up next month.
00:50 We may see higher government spending because this is being an election year.
00:54 You may see slightly higher government spending, which basically means that the system may
00:58 get a liquidity boost.
00:59 But that at this point in time is an uncertain future.
01:03 The way the bank has been guiding to the future, it does seem that it's going to be a tough
01:10 challenge to manage that liquidity base and if that is going to be a question, then to
01:14 fund that growth, you need the capital to come into the bank.
01:19 Right.
01:22 That of course is largely what Vishal and Sajid have been discussing.
01:26 Mr. Sajid, back to you on more on HDFC Bank.
01:30 What are the positions?
01:31 Why FIFI is selling this one?
01:33 I guess you've got some more details of what's happening in the stock.
01:35 So, let's take a look at the intensity of sale that happened yesterday, right, on HDFC
01:40 Bank counter.
01:41 The average traded volume or traded value was somewhere around 2600 crores on a daily
01:48 basis for the last one year.
01:50 Now, on Jan 17, we saw a total turnover of 13000 crores, which is nearly five times the
01:57 average daily traded turnover.
02:00 Delivery was nearly 60%.
02:03 If you put it into context for the entire Nifty Bank, because we saw good action coming
02:07 in Nifty Bank there, Nifty Bank turn delivery total was nearly 10% of the total turnover
02:14 of the market.
02:15 Total turnover of the market between NSE and BSE was 1.4 lakh crores and Nifty Bank itself
02:20 had 14800 crores of delivery across 12 banking stocks.
02:27 That brings us to the big question of what was the kind of total delivery happening in
02:33 some of the key stocks there.
02:34 8400 crores of delivery happening on HDFC Bank alone, nearly 1800 in SSE Bank and AXIS
02:41 had 1200.
02:42 All of them with high delivery percentages and that's what we saw in the FI numbers that
02:48 came in yesterday, provisional numbers, where the net sale was more than 10,000 odd crores.
02:53 A large chunk of that being coming from HDFC Bank where 8400 crores of delivery happened
02:59 there.
03:00 So, why are FI's selling?
03:03 The first thing is that the bank, it seems, has failed to guide the state on growth and
03:08 the merger complications basically, or the challenges which are coming in.
03:12 It's not been clear in its communication to the state or to the brokerages or to the fund
03:17 managers or to the institutions and that is now playing out for the last couple of quarters.
03:23 There is a sacrifice on growth and margin which bank is talking about, which basically
03:29 means that this bank is going to be derated from here on and because the institutions
03:35 were holding on to HDFC Bank despite the fact that there is negative news or underperformance
03:41 coming in, in the last couple of quarters.
03:44 In the last one year, it has fallen by 6 odd percent compared to the index.
03:49 It is basically primarily because they had consistent growth in terms of top line and
03:54 bottom line and good margins.
03:56 Now that is going to be a question mark for all the institutions going forward.
04:01 Also the final thing which I want to talk about is the HDFC Bank in the model portfolios
04:07 of all funds.
04:08 Whether or not it was performing or not, it was part of it.
04:12 Now that there is issue in it, it's dragging the entire returns for the funds and that's
04:17 the reason why we saw some selling happening.
04:21 Look at the ADR premium, how it moved yesterday.
04:25 It's come down, it become flat.
04:26 It's almost, you know, if you look at here, it's almost at 0.2 percent which basically
04:32 means that there has been a lot of selling in the ADR market.
04:35 The premium was always because there was a scarcity and liquidity, you know, in the US
04:42 market.
04:43 13.5 percent of HDFC Bank's equity is in the form of ADRs in the US market and there the
04:48 premium has always been higher.
04:51 Now it has fallen down to 0.2 percent which is at par with the local share price.
04:55 So there is going to be some pressure on HDFC Bank today itself but whether it's going to
05:01 be to the extent that we saw yesterday is going to be, it's a question mark here.
05:06 The bank will see some kind of correction as we see in trade today because of the Nifty
05:12 expiry there but I don't think it's going to be to the extent that we saw yesterday.
05:17 Thank you.
05:22 [music]