IDFC Limited Stock Research

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IDFC Limited Detail

IDFC Limited is in portfolio of Akash Bhansali. He is one of the top investors in India. The company belongs to Finance sector.

As per the Company website it is a holding Company as of now. Below are list of Companies it has ownership or shares

  • IDFC Projects        (100%)
  • IDFC Foundation  (100%)
  • IDFC NOFHC        (100%)
    • IDFC bank                                            (40%)
    • IDFC Bharat limited                             (100%)
    • IDFC AMC                                            (100%)
    • IDFC AMC Trustee                               (100%)
    • IDFC Investment managers Mauritius (100%)
    • IDFC Securities                                     (100%)
    • IDFC Capital USA Inc                            (100%)
    • IDFC Securities Singapore                    (100%)
    • IDFC Capital Singapore                        (100%)
    • IDFC Trustee                                         (100%)
    • IDFC Infrastructure Finance Limited     (81.48%)

IDFC Limited was demerged post RBI granted approval for new private sector bank set up. Above is current structure of the Group.In short the child companies are engaged in banking services, Asset management services and Infrastructure project finance services.

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I have shared long term price performance chart of the Company below.As per Dow theory of technical analysis price performance over a period of time reflects Company state.

IDFC Limited Stock Performance

The stock got listed in year 2005 at price 65 INR. The Company has not performed well after the demerger. It had steep fall in year 2015 just before 2016 and have not recovered from that fall.

If you look at above chart it was trading near 150 mark and after this demerger exercise and restructuring the Company moved below 50 mark. Since then it is trading below 50 in past couple of years.

The dividend yield of the Company is good at close to 2% at current market price. Since it is holding Company now the dividend yield is not that lucrative. Most holding companies pay decent dividend to share holders.

IDFC Limited My Opinion

IDFC Limited is a Finance Company. You can view it as Holding Company which has all its subsidiaries in Finance business. There are multiple holding Companies in India which operate purely in Financial space like HDFC Group and Indiabulls Group.

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The Group was granted Private sector bank license which one sees as positive for it. Private sector banks are slowly eating into market share of Public sector banks and in the due process they are creating wealth for investors. Bank Nifty now is dominated by private sector banks.

Now this is holding Company so one should compare it with other holding companies in its niche. Holding companies may have subsidiary companies operating in different niche (like Finance, Software or Cement) or operating in one niche with different products offering.

If you are investing in Holding Company then it means you are investing in underlying subsidiary companies as well. After looking at individual companies of the Group I am not too keen to invest in it.  There are better holding companies listed on exchanges for grab. I will not be tracking this Company.

In case you are interested then you can track the company by adding it to your stock watch list. That way you can keep close eye on the Company.

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