Check out these 2 Pvt sector Banks and compare their performance.
The Mgmt of the 2 Banks is different. The Mgmt at IBN continue to suffer huge losses. These are loans to Got sponsored clients who are default professionals. The Mgmt at HDB are professionals with a very strict code of conduct.
You may well ask why. The answer is that the Govt keeps promising them (IBN) National awards in their Make in India campaign which is now languishing.
Wall St. is laughing. Mr M with his big ego got himself snared by Wall St. There is no escape now. They can issue more shares but it wont dent the trend.
The best solution is to liquidate the assets now in a planned way. The Book value could be below 40c due to clean up litigation.
Check your posts . You have been persistent in this rant for over 6 mths while IBN continues to tank..
On the other hand check out when you were warned of the impending decline due to bad loans and inept Management .
Was -ve at $10.20. Now hoping for a low at $5.20 by April when another round of bad loans surfaces. Nepotism and corruption are intrinsic to the Banking sytems in the East.
Don't rush. More bad loans expected if monsoon is week. The P/E is way too high for the risk.
A correction of 20% from current levels is your downside risk for the next 4 mths. The upside is less than 5%.
Lot more pain. The P?E is way too high for the risk. The CEO & her Cronies should be turfed out. They keep giving loans to party sponsored friends in return for promises of National awards.
Look at HDB. They have kept to their fundamentals and are prospering.
Insurance Cos don't have a long enough bargepole. This can only be handled by a big Co. with deep pockets but it is not worth their time.!
The NAV for this CO looks -ve. Many fail to appreciate the liability and conflict of interest which are additional to the usual market supply demand forces.The supply demand equation shows steel n supply is excessive whilst demand has fallen.
The conflict issues are as follows. Steel plants have large numbers of workers all unionised. The Govt. in power panders to the unions by promising them they will never be shut down by Mgmt. To enforce this they threaten them by enforcing Clean up cost. These are huge and sufficient to bankrupt the Co. In brief the NAV of most steel Cos is -ve but they cannot address that because Govts. wont allow them to close.
The more years go by the bigger is the clean up cost. I doubt any Steel Co in this decade will see a turn around. At best we may see them break up the Co.; then close a few plants and walk away as has happened before during the Love Canal cleanup.
Investors were slow to realise they don't have a marketable product. The Insurance risk outweighs any reward. Besides no Hospital can afford the premiums demanded for neo-natal care.
Good. But still worrisome. F.A says that the Pvt Hedge Fuds are still short and this could lead to a PE correction by years end. Will reduce holdings by 50%..
NPA rising due to two factors- Economic slow down and above all rising defaults often due to poor decisions prompted by party sponsored Nepotism and hopes of awards.
Need a new team to turn the ship around.