Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of NIFTY in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on HDFC Bank, InterGlobe Aviation, Tata Motors Passenger Vehicles, Asian Paints, ICICI Bank, Coal India, Oil &amp; Natural Gas.</li>
</ul>


We analysed the earning revision of component stocks of NIFTY in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on HDFC Bank, InterGlobe Aviation, Tata Motors Passenger Vehicles, Asian Paints, ICICI Bank, Coal India, Oil &amp; Natural Gas.


NIFTY Index Earning Revision (Jun): HDFC Bank, InterGlobe Aviation, Tata Motors Passenger Vehicles

Specialist in Indian Banking and Economic Research

Hemindra Hazari

ICICI Prudential Life Insurance (IPRU IN)

Despite <a href="https://www.smartkarma.com/entities/icici-prudential-life-insurance" target="_blank" data-smartkarma-citation="entities:23608:1" rel="noopener">ICICI Prudential Life Insurance (IPRU IN)</a> (IPru Life) reporting improvement in long-term persistency ratios, there are worrying examples of brazen mis-selling of life insurance policies by the company through its corporate agent, Angel Financial Advisors and even its parent, <a href="https://www.smartkarma.com/entities/icici-bank-ltd" target="_blank" data-smartkarma-citation="entities:547:1" rel="noopener">ICICI Bank Ltd (ICICIBC IN)</a>. The cases of two 21-year old customers reveal the state of underwriting at IPru Life: <a href="https://youtu.be/Qjyb0jYyouo" target="_blank" rel="noopener">Sachin Khilari</a> (the first of three policies mis-sold to him commenced in October 2014) in Sangli district, Maharashtra and <a href="https://youtu.be/K15zslPNMpI" target="_blank" rel="noopener">Krishnapal Singh Chauhan</a> (who was sold his first policy in February 2019 and a further 10 in 12 months) in Banswara, Rajasthan, both highlighted by <a href="http://www.insuranceangels.in/" target="_blank" rel="noopener">Insurance Angels</a>. These cases illustrate the mis-selling of policies by violation of rules; non-compliance with anti-money laundering (AML) to determine source of funds of the policy holder; non-verification of income of customers; alleged <a href="https://twitter.com/insuranceangel/status/1333003681592205313?s=20" target="_blank" rel="noopener">forging</a>  of the signatures of policy holders; inflating of policy holders’ income on the forms; and the sale of multiple policies to an individual, where the collective premium exceeds the annual income of the policyholder. Each customer in a financial services company has a unique customer id where her/his Know Your Customer (KYC) protocols, proof of individual income and financial products sold are mapped. When multiple policies are sold by an insurance company to a single individual, it would show up on the customer’s profile. Prior to approving any further policies the underwriting team would examine whether the customer’s income can service the insurance premiums, and approve the sale. What is extremely alarming in these mis-selling cases is that when additional policies were sold to both Khilari and Chauhan, where the collective annual premiums were more than their annual incomes, the underwriters were readily approving the policies without verifying their income. Such professional misconduct completely exposes the underwriting system at IPru Life. The Insurance Regulatory and Development Authority of India (IRDAI), the regulator, and stakeholders in the company need to critically evaluate how such cases are bypassing IPru Life’s underwriting system.With such poor underwriting and basic protocol systems it is no surprise that ICICI Bank, IPru Life’s parent, has discontinued selling traditional life insurance policies for the last couple of years, even those of its subsidiary where senior ICICI Bank officials are deputed as CEOs. Anup Bagchi, executive director, ICICI Bank and non-executive director (nominated by ICICI Bank), ICICI Prudential Life Insurance, has gone on <a href="https://www.icicibank.com/managed-assets/docs/investor/quarterly-financial-results/2021/ICICI-Bank-Transcript-for-Analyst-Call-held-on-Oct-31-2020.pdf" target="_blank" rel="noopener">record</a> on his apprehension that the low long-term persistency ratios in the industry could have an adverse impact on their own bank customers. That a parent company which has firm control on senior executive management at its subsidiary declines to sell the subsidiary’s traditional life insurance products, as it cannot ensure near 100% long-term persistency ratio, speaks volume of IPru Life’s capabilities.It is time stakeholders and the regulator look beyond the neat and tidy persistency ratios and closely evaluate individual customer mis-selling complaints to understand how life insurance is actually mis-sold on the ground to unsuspecting customers and how underwriting is done by companies like IPru Life.

Despite ICICI Prudential Life Insurance (IPRU IN) (IPru Life) reporting improvement in long-term persistency ratios, there are worrying examples of brazen mis-selling of life insurance policies by the company through its corporate agent, Angel Financial Advisors and even its parent, ICICI Bank Ltd (ICICIBC IN). The cases of two 21-year old customers reveal the state of underwriting at IPru Life: Sachin Khilari (the first of three policies mis-sold to him commenced in October 2014) in Sangli district, Maharashtra and Krishnapal Singh Chauhan (who was sold his first policy in February 2019 and a further 10 in 12 months) in Banswara, Rajasthan, both highlighted by Insurance Angels. These cases illustrate the mis-selling of policies by violation of rules; non-compliance with anti-money laundering (AML) to determine source of funds of the policy holder; non-verification of income of customers; alleged forging  of the signatures of policy holders; inflating of policy holders’ income on the forms; and the sale of multiple policies to an individual, where the collective premium exceeds the annual income of the policyholder. Each customer in a financial services company has a unique customer id where her/his Know Your Customer (KYC) protocols, proof of individual income and financial products sold are mapped. When multiple policies are sold by an insurance company to a single individual, it would show up on the customer’s profile. Prior to approving any further policies the underwriting team would examine whether the customer’s income can service the insurance premiums, and approve the sale. What is extremely alarming in these mis-selling cases is that when additional policies were sold to both Khilari and Chauhan, where the collective annual premiums were more than their annual incomes, the underwriters were readily approving the policies without verifying their income. Such professional misconduct completely exposes the underwriting system at IPru Life. The Insurance Regulatory and Development Authority of India (IRDAI), the regulator, and stakeholders in the company need to critically evaluate how such cases are bypassing IPru Life’s underwriting system.With such poor underwriting and basic protocol systems it is no surprise that ICICI Bank, IPru Life’s parent, has discontinued selling traditional life insurance policies for the last couple of years, even those of its subsidiary where senior ICICI Bank officials are deputed as CEOs. Anup Bagchi, executive director, ICICI Bank and non-executive director (nominated by ICICI Bank), ICICI Prudential Life Insurance, has gone on record on his apprehension that the low long-term persistency ratios in the industry could have an adverse impact on their own bank customers. That a parent company which has firm control on senior executive management at its subsidiary declines to sell the subsidiary’s traditional life insurance products, as it cannot ensure near 100% long-term persistency ratio, speaks volume of IPru Life’s capabilities.It is time stakeholders and the regulator look beyond the neat and tidy persistency ratios and closely evaluate individual customer mis-selling complaints to understand how life insurance is actually mis-sold on the ground to unsuspecting customers and how underwriting is done by companies like IPru Life.

Brazen Mis-Selling by IPru Life: When Even the Parent Keeps a Distance, Something Surely Stinks

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/geddit-convenience-pvt-ltd-zepto" target="_blank" data-smartkarma-citation="entities:35873:1" rel="noopener">Zepto</a> is looking to raise about US$1bn in its upcoming India IPO.</li>
<li>Zepto Ltd is a quick-commerce company, focused on delivering groceries and everyday essentials within minutes through a network of dark stores and a technology-enabled logistics platform.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



Zepto is looking to raise about US$1bn in its upcoming India IPO.
Zepto Ltd is a quick-commerce company, focused on delivering groceries and everyday essentials within minutes through a network of dark stores and a technology-enabled logistics platform.
In this note, we talk about the not-so-positive aspects of the deal.


Aequitas - Zepto - The Negatives - Losses Will Continue

<a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank (HDFCB IN)</a>, India’s largest bank by market capitalisation appears to be the first off the block in demanding resignations from permanent staff at its non-bank finance company (NBFC) subsidiary, HDB Financial Services (HDB FS). While times are indeed difficult, stakeholders in the bank should note the manner in which the bank has conducted this covert operation. Officially, on Twitter, HDFC Bank <a href="https://twitter.com/ravisunHDFCBank/status/1259202460876505093" target="_blank" rel="noopener">states</a>, “no termination notices have been issued”, while numerous HDB FS staff are countering the bank by <a href="https://twitter.com/search?q=hdb%20financial%20services&amp;src=typeahead_click" target="_blank" rel="noopener">stating</a> that human resources personnel are calling them and demanding their resignation. The play with words by India’s largest private sector bank does not show its credibility and transparency in a favourable light. If the bank believes that in the changed environment of Covid-19 they are over-staffed, they should be upfront about it, introduce a retrenchment scheme for the identified staff and inform the public. Instead it appears the public and investors are being misled by the official spokesperson of the bank. The bank is focusing on the increase in head count in the period ending March 31, 2020, when the allegation is that the bank has taken the decision to remove staff after that date. The bank is not even prepared to acknowledge that they are downsizing. HDFC Bank’ statement also goes on to state, “as a group we do not operate like this.” Indeed, for this highly profitable group, which <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/hdfc-bank-gets-mandate-to-receive-donation-for-pm-cares-fund/articleshow/74996448.cms?from=mdr" target="_blank" rel="noopener">donated</a>  Rs 1.5 bn to the PM Cares Fund and is the banker for the same, to push out low-level staff and not own up to it is a dark stain on the HDFC brand. Moreover, it creates doubts in the public’s mind about the state of affairs at the bank, and the credibility of its official statements.Banking is all about trust, as the age-old adage says, “a banker’s word is his bond”. In these volatile times, HDFC Bank is in an unusual position (for it) of its share price being under pressure. In such a situation, if the bank’s official statements are seen as being misleading, stakeholders may turn extra cautious, and a public relations and labour issue may morph into a much larger issue. As it is the stock market is apprehensive regarding other cracks in governance at HDFC Bank: the CEO succession <a href="https://hemindrahazari.com/2020/01/24/hdfc-bank-succession-sumo-wrestling-is-a-spectator-sport-for-the-board/" target="_blank" rel="noopener">fiasco</a>, independent director, Sandeep Parekh’s <a href="https://hemindrahazari.com/2020/02/11/can-a-director-of-hdfc-bank-comment-on-bank-matters-in-his-personal-capacity/" target="_blank" rel="noopener">unauthorised</a> public statements on the bank as well as the bank’s <a href="https://hemindrahazari.com/2019/08/21/as-the-economy-slumps-can-hdfc-banks-retail-strategy-escape-being-dragged-down/" target="_blank" rel="noopener">unsecured</a> lending. This analyst has been concerned, and has <a href="https://hemindrahazari.com/2020/04/19/hdfc-bank-rectifies-bizarre-defiance-to-reserve-bank-of-indias-directives/" target="_blank" rel="noopener">documented</a> the major lapses by the Bank’s board of directors. Sadly the manner in which the bank is implementing downsizing only heightens these concerns.

HDFC Bank (HDFCB IN), India’s largest bank by market capitalisation appears to be the first off the block in demanding resignations from permanent staff at its non-bank finance company (NBFC) subsidiary, HDB Financial Services (HDB FS). While times are indeed difficult, stakeholders in the bank should note the manner in which the bank has conducted this covert operation. Officially, on Twitter, HDFC Bank states, “no termination notices have been issued”, while numerous HDB FS staff are countering the bank by stating that human resources personnel are calling them and demanding their resignation. The play with words by India’s largest private sector bank does not show its credibility and transparency in a favourable light. If the bank believes that in the changed environment of Covid-19 they are over-staffed, they should be upfront about it, introduce a retrenchment scheme for the identified staff and inform the public. Instead it appears the public and investors are being misled by the official spokesperson of the bank. The bank is focusing on the increase in head count in the period ending March 31, 2020, when the allegation is that the bank has taken the decision to remove staff after that date. The bank is not even prepared to acknowledge that they are downsizing. HDFC Bank’ statement also goes on to state, “as a group we do not operate like this.” Indeed, for this highly profitable group, which donated  Rs 1.5 bn to the PM Cares Fund and is the banker for the same, to push out low-level staff and not own up to it is a dark stain on the HDFC brand. Moreover, it creates doubts in the public’s mind about the state of affairs at the bank, and the credibility of its official statements.Banking is all about trust, as the age-old adage says, “a banker’s word is his bond”. In these volatile times, HDFC Bank is in an unusual position (for it) of its share price being under pressure. In such a situation, if the bank’s official statements are seen as being misleading, stakeholders may turn extra cautious, and a public relations and labour issue may morph into a much larger issue. As it is the stock market is apprehensive regarding other cracks in governance at HDFC Bank: the CEO succession fiasco, independent director, Sandeep Parekh’s unauthorised public statements on the bank as well as the bank’s unsecured lending. This analyst has been concerned, and has documented the major lapses by the Bank’s board of directors. Sadly the manner in which the bank is implementing downsizing only heightens these concerns. 

HDFC Bank’s Downsizing Programme: Disturbing Lack of Humanity and Transparency

<a href="https://www.smartkarma.com/entities/axis-bank-ltd" target="_blank" data-smartkarma-citation="entities:768:1" rel="noopener">Axis Bank Ltd (AXSB IN)</a> recently diminished the authority of its Chief Risk Officer (CRO) by taking corporate credit risk assessment away from him and giving it to the Chief Credit Officer. Cyril Anand, President and Chief Risk Officer (CRO), Axis Bank, has been ‘retired’ early, and the bank has appointed Amit Talgeri as Executive Vice President (EVP) and CRO. The bank has also downgraded the CRO to an EVP from the earlier designation of president, a position also held by Bapi Munshi, Cyril Anand’s predecessor. All these deliberate moves authorised by the Axis Bank board of directors will test the role of the CRO as <a href="https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10948" target="_blank" rel="noopener">envisaged</a> by the banking regulator. If it were to be followed by other banks, it would hollow out and undermine the importance of risk management in the banking industry.The appointment of Naveen Tahilyani as Group Executive Head – Banking Operations and Transformation to lead operations, technology, strategy and analytics also appears strange. He had served as the CEO of Tata AIA Life Insurance, a prominent insurance company at around the time Amitabh Chaudhry served as a CEO of HDFC Standard Life Insurance, and prior to Tahilyani’s appointment in Axis Bank he was on a sabbatical. He will now report to the CEO of Axis Bank. His appointment will also sideline the role of two senior executives: Himadri Chatterjee, who was president retail and wholesale banking operations, and Rajesh Daheya, executive board director (to whom Chatterjee reported). It is apparent that the new inductions at the senior level are part of the senior management shake-up by Amitabh Chaudhry, but only time can tell whether they will achieve the management’s goals or undermine the organisational structure and risk management in the bank.

Axis Bank Ltd (AXSB IN) recently diminished the authority of its Chief Risk Officer (CRO) by taking corporate credit risk assessment away from him and giving it to the Chief Credit Officer. Cyril Anand, President and Chief Risk Officer (CRO), Axis Bank, has been ‘retired’ early, and the bank has appointed Amit Talgeri as Executive Vice President (EVP) and CRO. The bank has also downgraded the CRO to an EVP from the earlier designation of president, a position also held by Bapi Munshi, Cyril Anand’s predecessor. All these deliberate moves authorised by the Axis Bank board of directors will test the role of the CRO as envisaged by the banking regulator. If it were to be followed by other banks, it would hollow out and undermine the importance of risk management in the banking industry.The appointment of Naveen Tahilyani as Group Executive Head – Banking Operations and Transformation to lead operations, technology, strategy and analytics also appears strange. He had served as the CEO of Tata AIA Life Insurance, a prominent insurance company at around the time Amitabh Chaudhry served as a CEO of HDFC Standard Life Insurance, and prior to Tahilyani’s appointment in Axis Bank he was on a sabbatical. He will now report to the CEO of Axis Bank. His appointment will also sideline the role of two senior executives: Himadri Chatterjee, who was president retail and wholesale banking operations, and Rajesh Daheya, executive board director (to whom Chatterjee reported). It is apparent that the new inductions at the senior level are part of the senior management shake-up by Amitabh Chaudhry, but only time can tell whether they will achieve the management’s goals or undermine the organisational structure and risk management in the bank. 

Axis Bank: Hollowing Out the Crucial Role of the CRO

India

HDFC Life Insurance Company Limited, doing business as HDFC Life, is an Indian life insurance company offering individual and group insurance solutions including protection, pension, savings, investment, annuity, and health plans. It operates through a multi-channel distribution network across India. The company is headquartered in Mumbai, India, and was incorporated in 2000.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

HDFC Life (HDFCLIFE IN)

NIFTY Index Earning Revision (Jun): HDFC Bank, InterGlobe Aviation, Tata Motors Passenger Vehicles

We analyzed NIFTY's consensus for Jun 2026 and highlighted changes of EPS in HDFC Bank, InterGlobe Aviation, Tata Motors Passenger Vehicles, Asian...

Ke Yan, CFA, FRM

Brazen Mis-Selling by IPru Life: When Even the Parent Keeps a Distance, Something Surely Stinks

Stakeholders need to look beyond the persistency ratios and evaluate individual customer mis-selling complaints to evaluate the state of...

Hemindra Hazari

Aequitas - Zepto - The Negatives - Losses Will Continue

Zepto is looking to raise about US$1bn in its upcoming India IPO. In this note, we talk about the not-so-positive aspects of the deal.

Sumeet Singh

HDFC Bank’s Downsizing Programme: Disturbing Lack of Humanity and Transparency

HDFC Bank (HDFCB IN), India’s largest bank by market capitalisation appears to be the first off the block in demanding resignations from permanent...

Hemindra Hazari

Axis Bank: Hollowing Out the Crucial Role of the CRO

Axis Bank Ltd (AXSB IN) recently diminished the authority of its Chief Risk Officer (CRO) by taking corporate credit risk assessment away from him...

Hemindra Hazari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)