Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>The <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index (NIFTY INDEX)</a> and the <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">NSE Nifty Bank Index (NSEBANK INDEX EQUITY)</a> reached all-time highs on 26 September 2024 but have since declined.</li>
<li>Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.</li>
<li>Opportunities present themselves either in stocks that stayed resilient during the downturn (<a href="https://www.smartkarma.com/entities/federal-bank-ltd" target="_blank" data-smartkarma-citation="entities:11784:1" rel="noopener">Federal Bank (FB IN)),</a>or fell and gained in implied volatility. A long-short strategy might also be considered.</li>
</ul>


The NIFTY Index (NIFTY INDEX) and the NSE Nifty Bank Index (NSEBANK INDEX EQUITY) reached all-time highs on 26 September 2024 but have since declined.
Most stocks in the Bank Index have fallen below their 200 and 50 day moving average,. Volatilities have gone up, but trade cheap when compared to historical levels.
Opportunities present themselves either in stocks that stayed resilient during the downturn (Federal Bank (FB IN)),or fell and gained in implied volatility. A long-short strategy might also be considered.


EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

India Equity Analyst - Fundamental & Thematic, Beat the Street

Sudarshan Bhandari

India Equity Analyst - Fundamental & Thematic

Beat the Street

Beat The Street was founded by Nimish Maheshwari and Sudarshan Bhandari, both of whom are Chartered Accountants by Profession, known for their expert analysis in the fields of Business, Sectoral analysis, and Corporate governance.

With a strong social media presence of 45,000+ Subscribers across various platforms, they are considered trusted voices in the industry. Their insights and analysis have been featured in some of India’s most prominent publications, including the Economic Times, Dalal Street Investment Journal, The Morning Context, and The Ken.

Their analysis on Bankrupt & Insolvent companies has been instrumental in saving investors from significant losses. They have a keen eye for identifying red flags and has identified exclusive redflags earlier in Vedanta, Nykaa, Dhani Services, Adani and many more.

Read Business Not Stock Prices

Equity Bottom-Up

<ul>
<li>On August 7, 2025, RBI granted AU Small Finance Bank in-principle approval to become India's first universal bank converted from SFB, the first full banking license issued in eleven years.</li>
<li>Universal bank status unlocks lower deposit costs (SFB rates run roughly 100bps above peers), eases the priority sector lending mandate from 60% to 40%, and removes product restrictions.</li>
<li>The structural rerating argument rests not on the license itself, but on whether AU can convert the funding cost advantage into sustainable NIM improvement while sustaining 20%+ loan growth.</li>
</ul>


On August 7, 2025, RBI granted AU Small Finance Bank in-principle approval to become India's first universal bank converted from SFB, the first full banking license issued in eleven years.
Universal bank status unlocks lower deposit costs (SFB rates run roughly 100bps above peers), eases the priority sector lending mandate from 60% to 40%, and removes product restrictions.
The structural rerating argument rests not on the license itself, but on whether AU can convert the funding cost advantage into sustainable NIM improvement while sustaining 20%+ loan growth.


AU Small Finance Bank: The First Graduate from India's SFB Sector

Market & Forensics Analyst, Beat the Street

Nimish Maheshwari

Market & Forensics Analyst

Thematic (Sector/Industry)

<ul>
<li>PSU bank credit growth exceeded private-bank growth in FY25 for the first time in more than a decade. Between FY22-FY26, private-bank share fell 14.5 percentage points in home-loans.</li>
<li>Asset quality has converged sharply. Competitive advantage is moving from provisioning relief to funding, pricing, distribution and the ability to deploy capital at an acceptable return.</li>
<li>The sector trade is no longer simply “private quality versus PSU risk.” One must distinguish volume share, absolute profit share, sustainable ROA and the valuation paid for each.</li>
</ul>


PSU bank credit growth exceeded private-bank growth in FY25 for the first time in more than a decade. Between FY22-FY26, private-bank share fell 14.5 percentage points in home-loans.
Asset quality has converged sharply. Competitive advantage is moving from provisioning relief to funding, pricing, distribution and the ability to deploy capital at an acceptable return.
The sector trade is no longer simply “private quality versus PSU risk.” One must distinguish volume share, absolute profit share, sustainable ROA and the valuation paid for each.


Why Indian Private Sector Large Cap Banks Are Not Performing?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/au-small-finance-bank-limited" target="_blank" data-smartkarma-citation="entities:24196:1" rel="noopener">AU Small Finance Bank Limited (AUBANK IN)</a> has received approval from the Ministry of Finance to increase its Foreign Ownership Limit from 49% to 74% (the maximum permitted).</li>
<li>The increased FOL will result in passive inflows from global index trackers in February and March. The inflows are multiple days of ADV.</li>
<li>There has been little increase in positioning. The increased Foreign Ownership Limit and the passive flows to come could lead to the stock moving higher over the next few weeks.</li>
</ul>



AU Small Finance Bank Limited (AUBANK IN) has received approval from the Ministry of Finance to increase its Foreign Ownership Limit from 49% to 74% (the maximum permitted).
The increased FOL will result in passive inflows from global index trackers in February and March. The inflows are multiple days of ADV.
There has been little increase in positioning. The increased Foreign Ownership Limit and the passive flows to come could lead to the stock moving higher over the next few weeks.


AU Small Finance Bank (AUBANK IN): Increased FOL & Large Passive Flows/ Impact

<ul>
<li>Gold loan specialised NBFCs are witnessing aggressive market share erosion as commercial banks leverage lower funding costs to capture nearly 50% of the gold loan sector.</li>
<li>This fierce competition has crashed industry yields to sub-19% levels, severely compressing NIMs and forcing established players into a defensive operating posture.</li>
<li>Lenders are now halting foreclosures to retain existing borrowers while slashing interest rates and expanding branch networks to protect their shrinking market territories.</li>
</ul>


Gold loan specialised NBFCs are witnessing aggressive market share erosion as commercial banks leverage lower funding costs to capture nearly 50% of the gold loan sector.
This fierce competition has crashed industry yields to sub-19% levels, severely compressing NIMs and forcing established players into a defensive operating posture.
Lenders are now halting foreclosures to retain existing borrowers while slashing interest rates and expanding branch networks to protect their shrinking market territories.


Defensive Pivots in Gold Lending: How NBFCs Are Fighting the 50% Banking Takeover?

India

AU Small Finance Bank Limited is an Indian scheduled commercial small finance bank. It offers a diverse range of products including savings accounts, current accounts, fixed deposits, loans (vehicle, MSME, housing, personal, gold, agriculture), debit and credit cards, and insurance. The company was founded in 1996 and is headquartered in Jaipur, Rajasthan, India.

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AU Small Finance Bank (AUBANK IN)

EQD | Nifty Banks – Single Stock Options and Relative Value Opportunities

The NSE Nifty Bank Index hit a record high in September 2024 but has since dropped. Option opportunities are found in resilient or volatile bank...

Gaudenz Schneider

AU Small Finance Bank: The First Graduate from India's SFB Sector

AU Small Finance Bank granted in-principle approval to become India's first universal bank, unlocking lower deposit costs and easing lending...

Sudarshan Bhandari

Why Indian Private Sector Large Cap Banks Are Not Performing?

Public-sector banks are using lower lending rates to win prime credit. The pressure on private banks is no longer about bad loans; it is about...

Nimish Maheshwari