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IDFC says can exit as promoter of IDFC First Bank since five-year lock-in period over

July 21, 2021 root Banking & Finance

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IDFC said it can exit as the promoter of IDFC First Bank since the five year lock-in period has ended. This is based on the communication with the Reserve Bank of India.

“… the RBI vide its letter …dated July 20, 2021, clarified that after the expiry of lock‐in period of five years, IDFC Limited can exit as the promoter of IDFC First Bank,” it said in a stock exchange filing on Wednesday.

Under RBI rules, the shareholding of the non-operative financial holding company, which is the promoter of the bank, will be locked in for a period of five years from the date of commencement of the business of the bank. IDFC Bank was set up in 2015. This means that the five year lock-in period is now completed.

As on June 30, 2021, IDFC Financial Holding Company held 36.56 per cent stake in IDFC First Bank.

IDFC First Bank was founded by the merger of IDFC Bank and Capital First on December 18, 2018.

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Banks review settlement processes for deposit accounts of deceased customers in view of Covid-19

July 21, 2021 root Banking & Finance

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Banks are reviewing their processes relating to the settlement of deposit accounts of deceased customers in view of the adverse impact of the Covid-19 pandemic, which as per official figures has claimed about 4.18 lakh lives so far.

They are weighing the possibility of quick settlement of partial deposit amount to provide an immediate relief to family members of the deceased and extending a helping hand in filing insurance claims if the deceased was covered by a life insurance scheme sold through them, among others.

In an advisory, the Indian Banks’ Association emphasised that banks need to sensitise their staff at various levels and particularly at the branch level, to handle death settlement cases sympathetically in the light of the pandemic.

The Association said all possible steps should be taken to mitigate sufferings of survivors of the family of the deceased depositor.

Quick settlement

Through the review, banks are expected to make their processes flexible and smooth by stipulating shorter settlement time. This could accelerate the process of settlement of the deposit accounts of the deceased.

Banks may also consider higher delegation to the branch level managerial staff or the delegation power may be reviewed for enabling quick settlement of a partial/limited amount of, say, up to ₹1 lakh to provide immediate relief to the family members of the deceased in cases where all the required compliances are in place.

In cases where nomination is available and there are no challenges in KYC (know your customer) compliance of the nominee, banks can make the claim format brief and compact. As per the advisory, production of legal representation from nominee may not be insisted upon up to a limit of ₹2 lakh.

Banking expert V Viswanathan underscored that when a nominee is available, there should be no delay in the settlement of the deposit account.

“Only two documents — death certificate of depositor and KYC document of the nominee for identity verification — are needed to credit the amount,” he said.

Further, an evidence of the nominee maintaining an account with a bank — a cancelled cheque leaf or passbook (this is to avoid credit to the wrong account) — to credit the money to his/her account is required.

Minor survivors

In case of the unfortunate death of both the parents or account holder and the nominee, branch managers may make discreet enquiries to ensure genuineness of the claimants/natural guardian. This is aimed at helping the minor survivors.

In the aforementioned case, banks may devise Standard Operating Procedures for extending some immediate help within the legal framework depending on the degree of reliance on the circumstances.

Viswanathan observed that in cases where minors lose their parents, one of the relatives of one of the parents can step in as an administrator and receive the money as guardian for them. Legal heirship certificate will be the only requirement.

If there are other legal heirs to the deceased, they should give a no-objection certificate (NOC) for releasing the money to children, he added.

Insurance claim

While handling cases of settlement of deposit accounts of deceased customers, banks can check whether a customer was covered under any insurance policy facilitated by them so that the family members can be advised suitably and necessary help can be extended in filing of insurance claims.

Banks have facilitated insurance cover under the Pradhan Mantri Swasthya Bima Yojana/ Pradhan Mantri Jeven Jyoti Bima Yojana and also under many schemes launched by the respective State governments and annual premiums in such cases are paid by debiting savings accounts of customers.

Grievance redressal

Appointing grievance redressal officers at Administrative Offices (AOs) and displaying their contact details on website can help in reducing the visits of the claimants to the branches and AOs for knowing the status of their requests, as per the advisory.

Banks can also explore introduction of non face-to-face processes like ‘Video-based Customer Identification Process’ to accommodate claims made by nominees unable to visit the branch.

Further, they can consider putting in place digital applications for processing, monitoring and accelerating the process of settlement. This can help in keeping the claimants informed about the claim status.

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Edelweiss Suggest A Buy A On This Healthcare Stock For Up To 28% Gains

July 21, 2021 root Personal Finance

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About the company given a ‘Buy’ call by Brokerage house Edelweiss

Max Healthcare Institute Limited (MHI) is one of India’s leading hospital chains with 16 facilities and ~3,400 beds. MHI was formed after the merger of Max Healthcare and Radiant (effective 1st Jun’20). Besides the core hospital business, MHI also has two related businesses – Max@Home and MaxLab.

The brokerage firm has made all such details basis the interaction with Abhay Soi (Chairman & MD) in our ‘Edelweiss Corporate Connect’ virtual conference on 30th Jun’21.

Improvement in non-Covid business:

With the decline in Covid cases, MHI is witnessing strong bounce-back in the non-Covid business, which has also resulted in an improvement in its overall ARPOB. In the previous year, the company’s business got impacted owing to nationwide lockdown and the farmers agitation. Currently, its OPD business has not yet fully recovered while the international business (contributing 10-12%) has recovered only 60% of pre-Covid levels.

Plans to reduce institutional business, improve EBITDA:

Currently, institutional business (pricing at ~40% discount to other segments) accounts for 35% of MHI’s occupied beds, which it plans to lower to 15% over the next 2-3 years. The consequent 20% difference will yield 40% higher pricing, and 85% of this higher pricing will increase MHI’s EBITDA. Many mature hospitals (older than five years) in Mumbai and NCR do not cater to the institutional business.

Cost- optimization plan to boost margins further:

In FY19, MHI’s consolidated EBITDA (Max + Radiant) stood at ~INR356cr. MHI achieved structural cost savings of ~INR220cr in FY20 and additional cost savings of ~INR108cr in FY21, which are permanent in nature. The cost savings has resulted in EBITDA increasing by INR328cr on a base of ~INR356cr, while EBITDA/bed has soared from ~INR28lakh in Q4FY20 to ~INR47lakh in Q4FY21. Further, due to the pandemic, MHI did transient cost savings in terms of salary cuts, however, as the situation improved, original salaries have been restored., said the report.

Reiterate brownfield expansion plan:

Brownfield projects were delayed by 1-2 months due to the second wave of Covid-19, and thus, new bed capacities will be available only after 2-3 years. MHI expects no capacity addition for the next two years. Further, while expanding organically or inorganically, MHI plans to maintain geographical concentration of its hospital clusters. Currently, MHI has ~INR800cr free cash flows, which it will use to pay debt (net debt stands at INR550cr) and explore inorganic expansion opportunities.

Focus on scaling related businesses: MHI experienced robust growth in its adjacency/asset-light businesses. MaxLab and Max@Home are growing at robust rates and generating high-teens EBITDA margins. Plans are afoot to move the lab business to a separate subsidiary, which will enable MHI to focus on both organic and inorganic growth in the diagnostic space.

Outlook and valuation:

The brokerage firm is of the view that “Max Healthcare deserves superior valuations as it meets all our key investment considerations – it has a superior case mix v/s peers, brand power, quality of care, cost efficiencies and presence in premium markets (Mumbai and Delhi NCR). Further, management is focusing on (a) optimising capacity utilisation in existing facilities/resources and patient mix, (b) increasing ARPOB, (c) scaling up capital-light businesses (Max@Home and MaxLab), and (d) potential targets for M&As. At CMP of INR261, the stock is trading at FY23E EV/EBITDA of 19.6x. We have revised our earnings estimates upwards for FY22/FY23E by 9.6%/20.6%, respectively. We maintain our ‘BUY’ rating on the stock with a revised target price of INR331/share (we have considered an average of DCF and EV/EBITDA to arrive at our blended target price).

Stock details

52 week range	97/290
Shares in issue	96.6 crore
M-cap	Rs. 25,790 crore
Promoter holding	70%
Last traded price	Rs. 259.45
Target price	Rs. 331

Disclaimer:

These 2 stock picks are from Edelweiss Wealth Research report, investors need to do their own analysis and research before betting on any of the stock. Herein the brokerage recommendation should not be construed for investment advice.

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Bajaj Finance net rises 4%, bad loans jump, BFSI News, ET BFSI

July 21, 2021 root Personal Finance

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The company’s assets under management grew 12 per cent to Rs 1.19 lakh crore as of June 30.

Mumbai: Bajaj Finance on Tuesday reported a consolidated net profit of Rs 1,002 crore for the quarter ended June 2021, a 4.2% increase over Rs 962 crore in the year-ago period.

The company said that the board of directors in their meeting also approved the appointment of Pramit Jhaveri, who headed Citibank India for nearly a decade, as an independent director on its board.

While the company’s assets under management (AUM) increased by 15% to Rs 1.6 lakh crore as of June 30, bad loans or gross non-performing assets (NPAs) rose faster to 2.96% of gross advances, from 1.4% a year ago. Shares of the company closed 1.2% lower at Rs 5,937.

“Since Q1 has been a large miss on expectations and provisioning buffer has declined, incremental bounce, collections and roll-back trends would be key monitorables. The management’s credit cost and growth guidance for the rest of the year is primarily anchored on these metrics staying healthy,” said Rajiv Mehta, analyst at Yes Securities.

“The deterioration in asset quality is not surprising given it was a Covid quarter without any regulatory moratorium and that the management had alluded to higher forward flows across overdue buckets due to collection constraints,” said Mehta.

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Digital banking app Revolut launches travel booking service, BFSI News, ET BFSI

July 21, 2021 root Banking & Finance

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By Anna Irrera

LONDON, – British-based digital banking app Revolut is launching a new service allowing users to book travel accommodation and receive up to 10% in cashback in its first non-financial or insurance product launch.

Revolut, which was valued at about $33 billion through a new investment round last week, will allocate 70 million pounds ($95.24 million) to cashback for customers using the new service, Stays, it said on Wednesday.

Stays is part of Revolut’s wider goal to help users spend “more smartly” when travelling, it said. It comes as coronavirus travel restrictions start to ease in some regions.

“After 18 months of endless restrictions and lockdowns, we want to give people more and make their money travel further,” said Marsel Nikaj, head of savings and lifestyle at Revolut.

The digital banking provider raised around $800 million in a funding round led by Softbank’s Vision Fund and Tiger Global Management last week. The cash injection made Revolut Britain’s most valuable fintech firm.

Launched in 2015, Revolut has more than 16 million customers and is aiming to become a leading financial super app. It gained popularity with travellers in its early days by offering cheaper and easier foreign exchange services than mainstream banks and now provides a range of products including trading and insurance. It has yet to become profitable.

The new booking product, which pits Revolut against online travel booking giants such as Booking Holdings Inc, will allow users to make reservations for flights, car rentals, and other travel needs.

It will go live in the UK on Wednesday, with EU and U.S. launches coming in the next few weeks. ($1 = 0.7350 pounds)

(Reporting by Anna Irrera; Editing by Nick Macfie)

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Policybazaar plans IPO to raise up to Rs 6,500 crore, BFSI News, ET BFSI

July 21, 2021 root Personal Finance

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Mumbai: PB Fintech, the parent entity of SoftBank-backed online insurance aggregator Policybazaar has approved a resolution to raise up to Rs 6,500 crore, or $870 million, via an initial public offering (IPO), making it the fifth Indian startup this year to initiate proceedings to hit the public markets.

The Policybazaar IPO is expected to be a mix of a fresh issue of shares and an offer for sale (OFS), wherein existing investors can sell their stakes directly through exchanges, according to the regulatory filings.

According to sources, the company is likely to file a Draft Red Herring Prospectus (DRHP) with markets regulator Securities and Exchange Board of India (Sebi) soon as it eyes going public by December this year.

The online insurance aggregator — like Paytm and Zomato — is also expected to raise a pre-IPO round, which could include a secondary transaction for existing investors to dilute their stakes.

The Gurugram-based firm’s board approved the initial share sale at an extraordinary general meeting that was held on July 5, the regulatory filings showed. The startup has also passed a special resolution to rename as PB Fintech Ltd., converting from private limited to public entity.

A Policybazaar spokesperson didn’t immediately respond to ET’s queries. News website Entrackr was first to report the Policybazaar IPO resolution.

Policybazaar recorded a loss of Rs 218 crore in FY20 against Rs 213 crore in the previous fiscal. The financial results for FY21 are not out yet. The firm recently acquired an insurance broking licence from The Insurance Regulatory and Development Authority of India (IRDAI), which is an upgrade from its status as a web aggregator.

The new licence will allow Policybazaar to set up its physical network while also expanding product and service offerings significantly, which include claims assistance and point-of-sale network.

Yashish Dahiya, Alok Bansal, and Avaneesh Nirjar founded Policybazaar in June 2008. The company’s list of investors includes Japan’s SoftBank Vision Fund, private equity firm True North, Premji Invest, Tiger Global and Temasek, among others.

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Bank of Baroda, U GRO Capital launch co-lending platform ‘Pratham’

July 21, 2021 root Banking & Finance

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Bank of Baroda and fintech platform U GRO Capital have launched a co-lending platform Pratham, under which ₹1,000 crore loan will be disbursed to the MSME sector in the country.

Commencements of loan disbursements under Pratham mark the 114th Foundation Day of Bank of Baroda, U GRO Capital — tech-focussed small business lending platform — said in a release on Wednesday.

“Pratham, a ₹1,000 crore co-lending programme, will allow the MSMEs to avail customised lending solutions at a competitive rate of interest with a significant reduction in turn-around time, it said.

The loan amount ranges from ₹50 lakh to ₹2.5 crore to be offered at an interest rate starting from 8 per cent with a maximum tenure of 120 months, it said.

“We believe that forging such partnerships is the way forward and collaborative efforts leveraging individual entities’ expertise are of utmost importance to take co-lending to MSME segment to the next level. This is a significant advancement in the same direction,” said Vikramaditya Singh Khichi, Executive Director, Bank of Baroda.

Support to MSMEs

The co-lending programme resonates with the bank’s intent to extend support to more micro, small and medium enterprises (MSMEs), he said.

The partnership with Bank of Baroda will enable the company to support more MSMEs in the remotest locations, and to help them revive and grow, Shachindra Nath, Executive Chairman and Managing Director, U GRO Capital, said.

With technology and sectoral expertise, U GRO Capital will solve the unsolved credit needs of such small businesses, he said.

Pratham requires minimum documentation for loan, said the company.

Company’s proprietary developed platform GRO-Xstream allows faster turnaround time, with an in-principle approval issued within 60 minutes, U GRO Capital said.

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Will comply with data localisation norms, says American Express Banking Corp India

July 21, 2021 root Banking & Finance

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American Express Banking Corp India told the Reserve Bank of India that it will comply with the data localisation norms. The RBI, in April this year, had restricted American Express from on-boarding new domestic customers onto their card networks from May 1 for violating data storage norms.

Manoj Adlakha, SVP and CEO, American Express Banking Corp India told BusinessLine that the bank continues to believe India is a strategic market for the company. “We are working very closely with the RBI. We are always very mindful that if there is a law of the land, we would be fully compliant,” Adlakha said.

Meanwhile, the company is working on expanding its presence in the country with higher customer engagements and more merchant partnerships.

“Right now, the key focus is in ensuring customers spend more than what a typical customer spends in the industry. We are focussing on increasing the spends per customer and make sure they stay engaged with us,” he said.

Appealing to millenials

He explained it is a myth that American Express cards attract only High Networth Individuals and said it also appeals millennials. “In 2019, about 40 to 45 per cent of our card acquisition were millennials. We have a suite of products focussed on different target segments,” he said.

The company has also focused heavily on adding new merchants, especially small merchants and everyday spend categories onto its networks. There are close to 15 lakh merchant partners in India. The local merchant coverage has grown 10 times in the last five years, with 5.5 lakh new merchants added in the last two years.

Commenting on trends in spends post the second wave of the Covid-19 pandemic, Adlakha said it’s still very early. He, however, expects a very quick revival of spends — as was seen in the three months of December 2020 and January and February 2021 — if there is no third wave. The bank has not seen any stress in terms of repayments.

“Industries where credit card spends have gone up significantly are groceries, insurance premium, utility bills, health and hygiene, savings, even OTT and entertainment,” he said, adding that within the online category spends there has been an uptake in education, online classes, health and wellness, online retail and dining or ordering in food.

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3 High-Rated Mutual Funds To Start SIP In 2021

July 21, 2021 root Personal Finance

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Axis Bluechip Fund Direct Plan Growth

Among the Bluechip fund category, Axis Bluechip fund has undoubtedly performed well since its existence from the last 8 years. The rationale behind this is that Axis Bluechip Fund Direct Plan-Growth returns over the last year are 40.14 percent. According to Value Research statistics, it has generated 16.80 percent average yearly returns since its inception. The fund has equity allocation across Financial, Technology, Services, Healthcare, FMCG sectors. Infosys Ltd., HDFC Bank Ltd., Bajaj Finance Ltd., Tata Consultancy Services Ltd., and Avenue Supermarts Ltd. are the fund’s top five holdings.

This fund has been rated by 5-star by both Morningstar and Value Research making it a decent bet for long-term capital appreciation. The fund currently has Rs 28,233 Cr in asset under management (AUM), and the current NAV as of 20 July 2021 is Rs 46.33. The fund has a low expense ratio of 0.49% and an exit load of 1%. One can start investing in this fund with a minimum amount of Rs 500 by the most preferred route Systematic Investment Plan (SIP).

Canara Robeco Emerging Equities Fund Direct Growth

Canara Robeco Emerging Equities Fund Direct-Growth is a Large & MidCap mutual fund launched by the fund house Canara Robeco Mutual Fund in January 2013. This fund has also received a 5-star rating from both Morningstar and Value Research, indicating that it has the potential to generate risk-adjusted returns. Canara Robeco Emerging Equities Fund Direct-Growth returns for the last year were 59.88 percent, according to Value Research statistics.

It has generated an average yearly return of 22.81 percent since its inception. The financial, automobile, healthcare, technology, and chemical sectors make up the majority of the fund’s holdings. HDFC Bank Ltd., Infosys Ltd., ICICI Bank Ltd., Axis Bank Ltd., and Bajaj Finance Ltd. are among the top five holdings of the fund. The fund has an expense ratio of 0.64% and SIP can be started with a minimum amount of Rs 1000. The fund currently has Rs 9,633 Crore in assets under management (AUM) and a NAV of Rs 161.33 as of July 20, 2021. If units are redeemed within one year of investment, the fund imposes a 1% exit load.

Nippon India Short Term Fund Direct Growth

Nippon India Short Term Fund Direct-Growth is a Short Duration mutual fund scheme that was established in January 2013 by the fund house Nippon India Mutual Fund. The 1-year returns for Nippon India Short Term Fund Direct-Growth are 6.42 percent. According to Value Research, it has provided an average yearly return of 8.79 percent since its inception. The debt allocation of the fund is spread throughout the Engineering, Construction, Sovereign, Energy, and Financial sectors. India Infradebt Ltd., Reserve Bank of India, Housing Development Finance Corpn. Ltd., GOI, and India Grid Trust are among the fund’s major holdings.

The fund’s expense ratio is 0.33 percent, which is comparable to other funds in the same category. As of July 20, 2021, the fund has Rs 9,249 crore in assets under management (AUM) and a NAV of Rs 44.04. The reason behind picking this fund for you is the fund has no exit load and you can start SIP per month with Rs 500.

Top Performing Mutual Funds In India

Based on the ratings and returns, here are the three best-performing mutual funds in 2021 to start SIP.

Funds	1 -Year Returns	3 -Year Returns	5-Year Returns	Rating by Morningstar	Rating by Value Research
Axis Bluechip Fund Direct Plan-Growth	40.14%	15.42%	17.39%	5 star	5 star
Canara Robeco Emerging Equities Fund Direct-Growth	59.88%	18.39%	19.18%	5 star	5 star
Nippon India Short Term Fund Direct-Growth	6.42%	9.03%	8.13%	5 star	4 star

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in

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4 Stocks Which Have Destroyed Investors’ Wealth With Time

July 21, 2021 root Personal Finance

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1. Reliance Infrastructure:

This is an Anil Dhirubai Ambani Group company, the company is primarily engaged in infra development and its core sectors include energy, infrastructure, E&C and defence. The company’s turnover as per the company website is Rs. 18,852 crore.

The company bagged ‘Best Metro of India 2016’ Award for having developed a marvel in Mumbai Metro one.

Stock price journey of Reliance Infra:

The company stock as in 2018 registered an all time high of Rs. 2641 and the last traded stock price of Reliance Infra is Rs. 76.85 per share, while its 52-week high and low are Rs. 109 and Rs. 19.2, respectively. The stock is part of the S&P BSe Small cap stock and is categorized in the ‘T’ category.

What weighed on Reliance Infrastructure stock?

For the last quarter of FY19, the company posted a huge loss of over Rs. 3000 crore and since then the stock has come crashing down. Now even as the group’s companies’ are under NCLT resolution there is a belief that recovery shall be much higher than what is owed to creditors and this is creating fresh interest for the stock.

Financials

As of now, regarding the company’s financials, its debt to equity is well below 1 i.e. a big positive, also the debtors turnover ratio is the highest at 4.6 times.

2. PC Jeweller:

It is the finest jewellery discovery platform offering a widest collection of curated designs to fit every occasion. The company takes pride in its policies that provide easy returns, free shipping, BIS Hallmark, 100% certified jewellery, life-time exchange, best and transparent prices and unique designs all under one roof.

Stock price journey

The jewellery company made its Indian stock market debut in the year 2012 and its price was fixed at Rs. 135 per share. The stock in the year 2018 made an all time high price of Rs. 600 and was last at July 20, 2021 quoted at a price of Rs. 26.40.

There were 2 concerns seen at the company then which led to a drag in its share price first there was a speculation made that the company’s promoters might have hidden information on its business association with Vakrangee. Also, one of the promoter in the company gifted his stake in the company to family members via off market transactions.

Latest financials and other metrics

For the June ended quarter the number of FIIs/FPIs in both number and % terms have increased their holding in the scrip, indicating positive momentum. The firm for the quarter ended March of FY21 posted positive financial results and for the complete financial year 2021, Profit figure came in at Rs. 60.84 crore. Another has been positive growth in PBT less OI of 186%.

3. Yes Bank:

Yes Bank was among the leading private sector bank in the country in existence since the year 2004. The commercial bank is into offering a host of services including investment banking, merchant banking & Brokerage businesses through YES SECURITIES and its Mutual Fund business through YES Asset Management (India) Limited, both wholly owned subsidiaries of the Bank.

What played havoc for Yes Bank scrip?

In mid 2019, Yes Bank scrip saw a lot of downgrades and even Moody’s placed private lender’s foreign currency issuer rating of Ba1 under review for downgrade. And from an all time high reached in Yes Bank’s scrip of Rs. 404 in 2018 again, the stock came tumbling down to Rs. 12.95 per share as of last trade.

Primarily the Moody’s note indicated that the liquidity pressure on the domestic finance firms is expected to impact the credit profile of YES Bank since it has substantial exposure to the weaker firms in the sector.

But later the crisis-ridden lender was rescued by RBI’s action plan and SBI led the bank’s recovery with a number of other banks taking the charge. Even after the recovery plan in place, the bank’s scrip didn’t saw much revival and it is substantially down from its all time high.

Yes Bank’s 52-week high and 52-week low price has been Rs. 20.75 and Rs. 11.1, respectively.

Financials still weak for the lender

– Net profit is -Rs. 3787.75 crore has fallen at 244%.

– NII is the lowest at Rs.968 crore

– Credit deposit ratio is also lowest at 102%

4. Vodafone Idea:

The telecom provider is an Aditya Birla Group and Vodafone Group entity offering a host of voice and data services across 2G, 3G and 4G solutions. The company is contributing immensely to the nation’s Digital India mission.

Stock market journey of Vodafone Idea shares

Vodafone Idea made its listing on the bourses in 2007 at a issue price fixed between Rs. 65- 75 and the stock hit its all time high of Rs. 123 in 2015 but now as of last trade as on July 20, 2021 settled at a price of Rs. 9 per share on the NSE. The stock’s 52 week low and high are Rs. 8.9 and Rs. 9.35.

Financials weak yet fund managers bet on this cash-starved telecom provider

For the March ended quarter of FY21, the firm’s loss expanded to more than Rs. 7000 crore. Nonetheless, despite precarious financials, mutual funds with the highest asset base such as HDFC AMC and Aditya Birla have bet on the stock and added the Vodafone Idea in their kitty. In fact some other mutual funds have betted on the stock, implying mutual fund’s positive outlook on the stock.

Positives seen for the scrip

The company is gearing to raise funds and is in talks with investors to keep the firm as a going concern.

Rising net cash flow and cash from its operations

Conclusion:

So, as we have seen these scrips crashing down heavily from their all time highs, investors need to time to time evaluate their portfolio and get out of such stocks and hence this is where portfolio rebalancing comes to play.

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