Some monopoly groups like Adani, Ambani are sitting on an ecosystem which allows them to consolidate and buy out assets but the rest of India is deleveraging and saying stay off business, says the CEO, Dimensions Corporate Finance.
What is your sense when it comes to some of the key banking names?
ICICI Bank has sold 2% in ICICI Securities. It tells us the bank is going to keep divesting off its subsidiaries and booking profits. If they are selling off ICICI Securities to book profits, obviously there is a dollop of bad debts or at least provisions coming their way. So to that extent, the market has now started to value some of the companies like SBI and ICICI. Given the subsidiary value, whatever it is, your bank’s intrinsic value is next to nothing or at least was next to nothing.
The fact that ICICI is divesting, means that monetisation can happen and therefore there is a cushion for the bank. So there are a) intrinsically strong banks and b) Banks like ICICI, SBI which have got subsidiaries and c) a whole bunch of smaller banks. That is where you pick and choose. But is it the time to go into smaller banks? I guess not. Is there arbitrage for the PSU banks? Perhaps yes, in a bank like SBI. And there can be ICICI, HDFC banks in the portfolio.
One can now safely argue the fact that possibly the rerating of some of the banks with