Is it the right time to enter IndusInd Bank now

The problem with Banking stocks in general, and IndusInd Bank in particular, is that the extent of NPAs likely to arise as a result of Covid-19 is as yet unknown.

Banks and NBFCs have given large sums as loans to a number of stressed sectors including real estate.

Recently, even Shapoorji Pallinji defaulted on Union Bank commercial paper worth Rs 200 cr.

Also, there is large exposure to Vodafone, whose fate is as yet unknown given the problems in the Telecom sector.

This is why IndusInd Bank has lost a large part of its market capitalisation (it is down 50% even over 5 years).

The best solution may be to wait for clarity to emerge as to the extent of NPAs after normalcy returns.

Alternatively, one can start buying small quantities whenever there is a dip.