Hi!
I have few anti-thesis points regarding IDFCFIRSTBK. Would love to understand the other POVs which could counter it. (I am new to the bank and NBFC space and still trying to learn and understand things in more depth, so please bear with me)
1.) IDFCFIRSTBK doesn’t have a granular CASA unlike that of HDFC or ICICI. Folks have put in money here only for higher interest rate. And they would move out the day the bank decreases the savings interest rate or someone with better interest rate comes up. IDFCFIRSTBK hasn’t really done well in acquiring salaried accounts, which are sticky and promised a higher customer LTV.
2.) Since the cost of funds are on the higher side, they are only able to loan out to more riskier segment, and during the cycle downturn the chance of NPA’s ballooning up is much much higher. Not sure though what % of the retail book is secured vs unsecured?
3.) Also since the book is relatively new and unseasoned it also poses a higher risk on again NPA increasing in the near future maybe after 12-18 months.
What would the counter thesis points here?
Note :- Bullish on the stock, and invested in it from lower level.
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