paytm is good at starting things but not sustaining them

Looks like something is fishy on this disclosure, since all vfx companies are down 12-15% after this fantastic scheem

As per me following things can happen going forward this includes some prospects as well as observation on recent scuttlebut:

1. Assets in north india (Near chandigarh were always under valued to avoid taxes)

2. Raipur manufacturing got merged last year only, that asset was worth 200-300 cr producing revenue on conversion basis for parent before merger.

3. All locations, they have huge land parcels, buildings are getting added now. Land value actual and Book always had big difference for them because they were procured in 2000’s and 90’s mostly and they follow cost model for subsequent measurement as per IndAS 16 “Property, Plant and Equipment.”

4. Likely to add fresh 500cr assets over next 2 years like one announcement earlier on 2nd March and 9th April but with lower asset turn in future because now the assets based will increase as new capex is done on today’s price bit still they will have decent asset turnover relative to industry peers

So the company used to do other work of pipe making from its sister concerns prior to the merger of all into the listed entity and now they plan to go completely backward like hariom pipes, sambhav sponge (unlisted player in raipur)
So the overall prospects looks good to me going forward.

I agree with the views and would like to add.

The most important criteria for deposits appear to be 1. safety factor followed by 2. interest level and then 3. service levels. This is strongly indicated by the fact that PSBs continue to have major share of deposits despite low savings interest rate and indifferent service levels. If the govt were to withdraw their safety guarantee, I am sure the deposits will tend to evaporate.

Therefore as long as the bank meets the criteria of a particular class of customers, the deposits will remain sticky. In my opinion Customers/deposits are sticky due to the characteristics of the glue( composite offering by the bank) and not the other way round. Every Customer needs a bank for his deposits without any other option and will shift to another bank only if he gets a distinctly superior package of safety+ interest rate+service.

HDFC is popular because everybody you transact with has an HDFC a/c and transfers are smooth and instant. It has Large network of branches and ATMs and service levels are good. They charge you a premium through lower interest. IDFC is however doing well in building credibility and trust, which is the most important factor. But they have a long way to go to achieve the status of “too big to fail”. They seem to have already achieved “too important to fail”. Their service levels are the best in my experience and a 7% interest in savings a/c is a powerful magnet.

It’s falling continuously from top. Any negative news?
Even though the business is reasonably valued.