In today’s briefing:
- IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next
- IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns
- Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well
- The Beat Ideas: Narayana Hrudayalaya Ltd (NHL) ~ Driving Growth from India to Cayman Islands
- The Beat Ideas: Shilpa Medicare
IndusInd Bank (IIB IN): Stock Crashes on Derivatives Losses; Index Selling Next
- The Indusind Bank (IIB IN) stock was down 27% yesterday following the announcement of Derivatives Portfolio losses that have wiped out 2.35% of equity.
- Foreign investors were big sellers in the last 3 months of 2024. That led to increased foreign room, leading to an index upweight in February and index inclusion in March.
- The drop in market cap and free float market cap will see Indusind Bank (IIB IN) deleted from the S&P BSE SENSEX Index in June and the NIFTY Index in September.
IndusInd Bank: Derivative Discrepancy Surfaces, Raising Governance Concerns
- IndusInd Bank recently disclosed a significant accounting discrepancy in its derivatives portfolio, estimated to impact its net worth by INR 1,580 crore (~2.35%).
- The issue pertains to internal trades executed over the past 7–8 years, now identified through a detailed internal review initiated following regulatory changes.
- This development, when viewed alongside the abrupt CFO exit, regulatory pushback on CEO tenure, and existing operational challenges, raises concerns around internal controls, risk governance, and management credibility.
Bank of Baroda QIP Early Look – Well Flagged but Last Deal Did Not Do Well
- Bank Of Baroda (BOB IN) is looking to raise about INR 85bn (US$980m) in its upcoming qualified institutional placement (QIP).
- In an announcement released on Feb 13, 2025, BOB mentioned its board’s approval to raise upto INR85bn via various modes including a QIP. Since then, the shares have corrected 1.2%.
- The deal would be a relatively large one to digest at 39 days of three month ADV. The company’s last fundraise did not do well.
The Beat Ideas: Narayana Hrudayalaya Ltd (NHL) ~ Driving Growth from India to Cayman Islands
- Narayana Hrudayalaya Ltd (NARH IN) is a prominent player in the Indian healthcare sector, distinguished by its commitment to providing affordable, high-quality medical services.
- The company established its first international hospital in the Cayman Islands in 2014, targeting patients from the Americas and Caribbean regions by offering competitively priced medical services
- Management has outlined a capex guidance of around INR 4,000 crores over the next 3 to 4 years, funded by healthy cash flows and stable operating margins.
The Beat Ideas: Shilpa Medicare
- Shilpa Medicare (SLPA IN) will begin commercializing new molecules across segments, driving growth to new heights as older products are phased out, ensuring sustained progress and innovation in its business.
- In recent years, the company has experienced growth stagnation and declining profitability due to US FDA issues affecting both the company and its key client in the API segment.
- The company’s pipeline of new molecules offers significant growth potential, with a single successful molecule poised to elevate the company to unprecedented levels over the next five years.
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