Mumbai: Kotak Institutional Equities recommends buying holding companies given the current valuations and large holding company discount.The brokerage said it is seeing diverging performance for small finance bank shares leading to holding company discount for Equitas Holdings declining to below 30% from around 45-50% levels since listing of the small finance bank. The brokerage said the discount for Ujjivan Financial Services is still around 45% compared to around 50% average since listing.Shares of Equitas, which ended up 1.9% at 70 on Friday, have risen 83% since March 23 — when the market rebound began. Ujjivan Financial Services, which rose 4% to Rs 283.45, have gained 94% during the same period.The RBI panel recommended that non-operative financial holding company should continue to be the preferred structure for all new licences to be issued for universal banks. However, it should be mandatory only in cases where promoting entities, converting entities or individual promoters have other group entities."We expect discounts to shrink as merger probability improves further and we continue to see better risk-reward in owning holdco shares due to attractive valuations for Equitas Holdings (0.7 times FY2022 estimated book) and higher holdco discount for Ujjivan FS,” said Kotak Institutional.
Friday, November 27, 2020
Home
Economic News
Kotak recommends buy for holding cos of Equitas, Ujjivan, sees better risk reward | Economic Times
Kotak recommends buy for holding cos of Equitas, Ujjivan, sees better risk reward | Economic Times
Subscribe to:
Post Comments (Atom)
-
HYDERABAD: The National Institute of Nutrition (NIN) has added another 5kg to the ideal weight of Indians. While the weight of an ideal or r...
-
Morgan Stanley and JPMorgan say buy the dip after treasury rout https://ift.tt/VBYjxPd Stanley sees scope for a rebound in Treasuries on exp...
-
Maruti an attractive bet on high margins, but slowing demand could be a worry https://ift.tt/VrpMTAI course, we aren't talking about its...
No comments:
Post a Comment