November, 2014 | Dalal Street

Equity Research

Which Stocks Will Benefit from Mission – Namami Ganga of NaMo ?

November 24, 2014April 18, 20202 min read

The River Ganga is considered amongst the holiest rivers in the country with thousands of pilgrims thronging its banks to take a dip. However, the river today holds the infamous distinction of being the fifth most polluted river in the world. The narendra Modi led government has promised to clean up the river and wants to complete the same over the next decade by spending Rs510bn on setting up sewerage plants in 118 towns and villages.

Sewerage treatment opportunity to Clean Ganga
Daily sewerage being generated by 50 cities (more…)

Equity Research

Kotak Bank to be 4th Largest Private Bank after ING Vysya Merger

November 21, 20142 min read

Kotak Bank will offer 725 shares for every 1000 shares held in ING Vysya Bank. The swap ratio at current prices implies a valuation of Rs159 bn for ING Vysya Bank (2.1x Sept- 14 BV) and is 2.6% higher than its last closing price. The good part is that Kotak is using its expensive stock currency (4.3x trailing book) to buy an asset at 2xBV. However, lower RoE for ING Vysyawill deplete the RoE for the combined entity and Kotak will have to grow fast to improve RoE over time. The deal will result in 18% dilution for Kotak Bank at current prices.

Kotak Bank will induct one member from ING Vysya Bank on the board of the merged entity. Kotak Bank intends to keep one savings account interest (more…)

Breaking Corporate India Earnings News

Why ING Vysya Natural Fit for Kotak Bank to Takeover ?

November 20, 20142 min read

Kotak Bank is in talks with ING Vysya Bank for an acquisition. ING has been selling assets across the Asian region in its effort to shore up its capital base to meet Basel-III norms.

Kotak has been a very conservative banker and has used capital very prudently, in our view. ING would be an ideal target for it, in our view, as there are less culture issues compared to other old private sector banks that have old workforces and considerable productivity and (more…)

Economy, Markets and Macro Views

India Private Sector Banks Gain Market / Profit Share

November 9, 20142 min read

The H1-2015 earnings from Indian Banks confirm acceleration in market share gains for private banks given the rising capital constraints and stressed financials of PSU banks. Private banks have taken a 30% share of incremental loans in past 12 months and 50% share of loans in last six months, as compared to their market share of 20% of the total banking system loans.

While, private banks have even historically had (more…)