My next pick: INDBANK MERCHANTBANKING ( BSE CODE: 511473 )

[sureshk123]

The below is as stated in the indbankonline website

Fund based exposures

Indbank was also undertaking fund-based activities under Lease, Hire Purchase, ICD deployment and Investments. Indbank has discontinued fund based activities consequent to SEBI regulations coming into force with effect from December 1997 and had decided to undertake only fee based activities. The existing exposures as on December 1997 are continued to run down their contracted period. Indbank has an exposure of Rs. 58.45 crores under fund based operations in lease, hire purchase and ICDs as on 31.12.2006 comprising of NPAs against which a provision of Rs. 52.93 crores has been made. Indbank is continuing to focus its efforts on recovery of NPAs and in the current year has recovered Rs. 9.51 crores from NPAs.

If you look at the quarterly results as on 03/07 the income from fund based activity is 1428 lakhs and for 06/07 and it is 2307 but the fee based income has not grown significantly in both quarters.

regards
Suresh Kumar

 

[ram.ramanathan]

Hi Suresh
I need to look at the September quarter results of Indbank to get a clear picture.
Thanks

 

[ram.ramanathan]

Closing Indbank recommendation for a loss of around 12%. 12% loss is nothing compared to 530% gain in my last pick Modern Dairies and 100% gain in Heritage before that and 27% gain in Sujana. The market must know something we don't know.

 

[bramanayagam]

mr ramanathan,
what is ur final conclusion , is indbank merchant banking is good for investment or not?

 

[rkkarnani]

Closing Indbank recommendation for a loss of around 12%. 12% loss is nothing compared to 530% gain in my last pick Modern Dairies and 100% gain in Heritage before that and 27% gain in Sujana. The market must know something we don't know.

I may be wrong Ram, though accepting a bad call is divine but trying to justify it by quoting other profitable calls is very human and better avoided!!!

 

[kiranku]

Now whats the final decision guys what priceshould i buy it and till what time to hold to get what % gain pls explain iam new to investing friends...

 

[rajbir]

Hi Ram- I have accumulated 5700 shares @ average price of 36.13 on this recommendation since last week. I did not gain from Modern 's recommendation but you sounded very sincere.

Today is the 1st day that it went up. Do you recommend that I book loss or wait based on your initial study. I can wait a couple of years and had a similar timeframe in mind when I bought this script. Waiting anxiously for your reply.

 

[ram.ramanathan]

Hi All

Sorry for the short message to exit Indbank. As I said I was traveling and couldn't get much time to type up a detailed reason. The main reason I exited Indbank was because, I couldn't trust the financial results of the comany for the last 2 quarters. Even though Indbank is claiming that it made the Rs.7 in EPS in the first half through its main stream business, it is not believable. Usually if a company makes earnings from outside its main stream business operation, they are supposed to notate that in the results. But Indbank didn't do so. That's why I believed the numbers. But I studied the annual report of this company for the past few years and came to the conclusion that this much revenue and EPS could not have come from its main stream business. SEBI should regulate these companies for not notating it in the results.

Hope that explains why I exited at around 10% loss.