Hi @amitverma21, thanks for sharing this. Its a new perspective to look at from numbers point of view.
Just wanted to check, do you use this criteria for high growth (real or expected) companies as well? Such as Varun Beverages, Kaynes etc in today’s times. Because usually these companies trade at higher Book Value and hence the yield would always be lower in the higher growth phase

Tata is already in this segment with Helios but unlike Ethos, it doesn’t currently deal in the ultra-luxury segment yet (won’t). There is also Tata Cliq Luxury (orders fulfilled by Helios) but none of these provide the boutique experience and exclusivity like ethos, not even close. Jewellers like Malabar sell watches too but has been a flop scene.

as a standalone entity, perhaps no (historically payments bank wasn’t one of the greatest ideas to begin with during Raghuram Rajan’s era) due to its truncated ability vis-a-vis any other commercial banks. then regime change post demon didn’t help!

however, PPBL as a sponsor bank powering PPSL as its only client who brought 30+ cr consumers (UPI handles) and 6cr merchants (providing settlement destination to easy on/off rails for txns) has definitive value.

so if other commercial banks takeover (acquisition) or simply change or mgmt (like yes bank) whose primary motivation or CASA accounts, then there’s something there imho. also big banks can bring their regulatory / compliance frameworks which RBI loves (again yes bank as an example).

so let’s wait and watch. if scenario 2 plays, I’ll have more confidence in the future narrative of PPSL (public entity), than scenario 1 since seamless execution risks still remains, however scenario 3 is out or the picture in the immediate future.

Thanks for the additional clarifications and context. I understand high-yield has to do with the ratings. I was using the phrase higher yield loosely. However, like you mentioned, ratings are no guarantee of credit quality. Also, our assessment of companies in the high-yield category can vary. For instance, you are comfortable with Edelweiss whereas I am not. Not saying that there is anything wrong with them, just my own perception. So I will probably not purchase their bonds. That said, my key takeaway from this discussion is that it’s probably ok to put in a little bit of my money there. Caveat emptor, of course!

Can Titan or other retail jewellers disrupt this model or take market share from Ethos ?