Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Event-Driven

<ul>
<li>In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.</li>
<li>The HDFC/HDFC Bank Merger is expected to trigger index changes in the next few days and we take a look at our expectations for these intra-review changes.</li>
<li>Apart from that, I see no other changes for SENSEX in December 2023. However, there could be up to six changes for both BSE 100 and BSE 200.</li>
</ul>


In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.
The HDFC/HDFC Bank Merger is expected to trigger index changes in the next few days and we take a look at our expectations for these intra-review changes.
Apart from that, I see no other changes for SENSEX in December 2023. However, there could be up to six changes for both BSE 100 and BSE 200.


Quiddity Leaderboard BSE/​​​SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

<ul>
<li>This is at a time a shocker and at a time, not. Because of rising regulatory requirements for NBFCs, this was to be expected at some point.</li>
<li>The deal pays Limited shareholders a slight premium vs previous close, but enables them to exit without a holdco discount. </li>
<li>Early days yet regulatorily speaking, but accretive, and it makes a lot of sense. It will be appreciated. </li>
</ul>


This is at a time a shocker and at a time, not. Because of rising regulatory requirements for NBFCs, this was to be expected at some point.
The deal pays Limited shareholders a slight premium vs previous close, but enables them to exit without a holdco discount. 
Early days yet regulatorily speaking, but accretive, and it makes a lot of sense. It will be appreciated. 


Shocker! HDFC Bank To Merge With HDFC Limited

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

Brian Freitas

Pan-Asia Index Rebalances/Events/Delta One

After trading at a premium of just over 10% for a long time, <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd" target="_blank" data-smartkarma-citation="entities:559:1" rel="noopener">HDFC Bank (ADR) (HDB US)</a> is now trading at a 20% premium to <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> with the spike coming in the last couple of weeks during which time the volumes on the ADR have been higher than normal.While there may be more flow coming on the ADR, we feel that the premium should peak in the near future and recommend selling the ADR, buying the local shares (or the single stock futures) and hedging the USDINR FX. With local shares available to foreign investors, existing holders of ADRs should look to switch to the local line.In this Insight, we look at the ADR premium, the shareholding pattern on <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>, the ADR headroom, the FPI holding on HDFC Bank, and catalysts that could take the premium higher or lower.

After trading at a premium of just over 10% for a long time, HDFC Bank (ADR) (HDB US) is now trading at a 20% premium to HDFC Bank (HDFCB IN) with the spike coming in the last couple of weeks during which time the volumes on the ADR have been higher than normal.While there may be more flow coming on the ADR, we feel that the premium should peak in the near future and recommend selling the ADR, buying the local shares (or the single stock futures) and hedging the USDINR FX. With local shares available to foreign investors, existing holders of ADRs should look to switch to the local line.In this Insight, we look at the ADR premium, the shareholding pattern on HDFC Bank (HDFCB IN), the ADR headroom, the FPI holding on HDFC Bank, and catalysts that could take the premium higher or lower. 

HDFC Bank ADR - Too High a Premium to Pay

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>HDFC reported a PAT of INR44.5b in 2QFY23 (5% beat), up 18% YoY, primarily driven by a lower effective tax rate of ~18% (because of higher dividend income).</li><li>Core PPOP grew 15% YoY to INR43.8b. Margin was stable QoQ at 3.4% in 1HFY23.</li><li>Credit costs fell by ~4bp QoQ to ~32bp, aided by a decline of ~20bp in GS3 and resolutions in the nonIndividual segment.  Disbursements in the Individual segment grew 36% YoY to INR440b.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HDFC reported a PAT of INR44.5b in 2QFY23 (5% beat), up 18% YoY, primarily driven by a lower effective tax rate of ~18% (because of higher dividend income).Core PPOP grew 15% YoY to INR43.8b. Margin was stable QoQ at 3.4% in 1HFY23.Credit costs fell by ~4bp QoQ to ~32bp, aided by a decline of ~20bp in GS3 and resolutions in the nonIndividual segment.  Disbursements in the Individual segment grew 36% YoY to INR440b.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HDFC - Operating Performance in Line; Retail Loan Growth Healthy

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/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a>, the online banking arm of <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>, aims to raise up to around US$630m in its Japan listing in April 2023.</li>
<li>RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.</li>
<li>In our earlier notes, we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations in the IPO price range.</li>
</ul>



Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.
RB is the largest internet bank in Japan, by number of accounts. As of Dec 22, it had 13.3m deposit accounts with a total deposit base of JPY8.8tn.
In our earlier notes, we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations in the IPO price range.


Rakuten Bank IPO - Lower Range Makes It Even More Attractive

India

Housing Development Finance Corporation Ltd. HDFC provides housing finance company. The Company provides wide range of housing loans, loan for home improvement, extensions, top ups, and non housing loans and loans for non resident Indian (NRI). HDFC serves customers in India, kuwait, Singapore, Oman, UAE, and the United Kingdom.

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

HDFC Limited (HDFC IN)

Quiddity Leaderboard BSE/SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

Adani Enterprises or JSW Steel Ltd could replace HDFC in SENSEX. Hindustan Aeronautics and Linde India could be the replacement names for HDFC in...

Janaghan Jeyakumar, CFA

Shocker! HDFC Bank To Merge With HDFC Limited

HDFC Limited and HDFC Bank announced a surprise" Scheme of Amalgamation this morning. It offers a slight premium, and lots of synergies, but most...

Travis Lundy

HDFC Bank ADR - Too High a Premium to Pay

With the HDFC Bank ADR premium spiking to 20% in the last couple of weeks, we look at the ADR premium history and suggest scaling into a short ADR/...

Brian Freitas

HDFC - Operating Performance in Line; Retail Loan Growth Healthy

HDFC reported a PAT of INR44.5b in 2QFY23 (5% beat), up 18% YoY, primarily driven by a lower effective tax rate of ~18% (because of higher dividend...

Motilal Oswal

Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.

Sumeet Singh

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard BSE/​​​SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

Adani Enterprises or JSW Steel Ltd could replace HDFC in SENSEX. Hindustan Aeronautics and Linde India could be the replacement names for HDFC in...

Janaghan Jeyakumar, CFA

Shocker! HDFC Bank To Merge With HDFC Limited

HDFC Limited and HDFC Bank announced a surprise" Scheme of Amalgamation this morning. It offers a slight premium, and lots of synergies, but most...

Travis Lundy

HDFC Bank ADR - Too High a Premium to Pay

With the HDFC Bank ADR premium spiking to 20% in the last couple of weeks, we look at the ADR premium history and suggest scaling into a short ADR/...

Brian Freitas

HDFC - Operating Performance in Line; Retail Loan Growth Healthy

HDFC reported a PAT of INR44.5b in 2QFY23 (5% beat), up 18% YoY, primarily driven by a lower effective tax rate of ~18% (because of higher dividend...

Motilal Oswal

Rakuten Bank IPO - Lower Range Makes It Even More Attractive

Rakuten Bank (5838 JP), the online banking arm of Rakuten (4755 JP), aims to raise up to around US$630m in its Japan listing in April 2023.

Sumeet Singh

Quiddity Leaderboard BSE/SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes