Skip to main content

Reliance Capital shares fall 17% as home finance business demerged

Reliance Home Finance (RHF) is expected to be listed in the second half of September.

Reliance Capital shares fell more than 17 percent in opening trade Tuesday due to hiving off home finance business.

Today is the ex-date for demerger and the record date for the same is fixed as September 6, which means person who holds shares of Reliance Capital on September 6 will get shares of Reliance Home Finance. NIFTY FUTURE TIPS

Reliance Capital shareholders will receive one share of Reliance Home Finance for every share held. Post demerger, Reliance Capital will continue to hold a 51 percent stake in Reliance Home Finance.

Reliance Home Finance (RHF) is expected to be listed in the second half of September.

"The demerger of the home finance business along with separate listing (record date of September 6, 2017) will entail sharper focus (pointed business targets) and more efficient capital allocation. Large opportunistic landscape and reinvigorated management team will help RHF sustain growth momentum and attain superior return ratios," said Edelweiss that maintained buy rating on Reliance Capital.

Given the huge opportunities in the housing segment (under-penetration /government/regulator support), the research house believes there is immense scope for Reliance Home Finance to sustain/improve growth momentum.

The business is currently high growth average margins business.

"While cost ratios (more than 40 percent in Q1FY18) are currently taking a toll on returns, scaling business along with cost focus (efficient cost allocation and digital initiatives) will help the company improve cost ratios and, consequently, improve returns profile (take return on assets to 1.5 percent levels versus current 1 percent levels) while asset quality continues to be stable given strong risk management framework," Edelweiss said.

At 10:04 hours IST, the stock price was quoting at Rs 732.35, down Rs 86.45, or 10.56 percent on the BSE.
www.shristocktips.com

Comments

Popular posts from this blog

Nifty could slip towards 9,900; 3 stocks which could give up to 11% return

A close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

The Nifty index Futures continued to slide lower for the second month in a row making it 10 percent decline from the record highs. Further, it has broken down from a broadening wedge pattern along with a close below the 200-DMA, affirming weakness dominant in the markets at the moment.

A sustained trade below 10,050 can accelerate the fall to levels of 9,930-9,700. However, a close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.

Moreover, the relative strength index or the RSI has turned down from the neutral levels of 50 on two occasions in recent pullbacks suggesting further weakness in the coming trading sessions.

Here is the list of stocks which can give up to 11 percent return:

Arvind Ltd: SELL| Target Rs345| Stop Loss Rs410| Return 11%

On the weekly chart, Arv…

Market Update: PSU bank index outperforms as PNB, Syndicate Bank jump 2-5%; JP Associates zooms 11%

The market breadth was in favour of the advances with 957 stocks advancing while 668 declined and 383 remained unchanged. On the other hand, in the BSE, 1176 stocks advanced and 888 declined and 108 remained unchanged.

The Indian markets on Friday morning were trading flat with the Nifty shedding 51 points or 0.49 percent  while the Sensex was down 178 points.

The Nifty PSU banking index was up 0.6 percent led by stocks like Syndicate Bank which jumped 5 percent followed by Allahabad Bank which gained over 3 percent. IDBI Bank and OBC were the other gainers. PNB gained 2.38 percent.

The top Nifty gainers included Mahindra & Mahindra and Aurobindo Pharma which were up 1.7 percent each followed by UPL, Yes Bank and Zee Entertainment.

The top Nifty losers included IOC and BPCL which fell 2 percent each followed by HPCL, Tata Motors and NTPC.

The most active Nifty stocks included IDBI bank which jumped over 3 percent while JP Associates zoomed over 10 percent after Rakesh Jhunjhunwala…

HDFC Sec retains sell on Bharti Infratel, reduces target to Rs 310 despite 22% fall in last 2 months

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

Bharti Infratel shares declined 1.5 percent to close at Rs 368 on Tuesday after HDFC Securities has reiterated its Sell rating on the stock with revised target price at Rs 310 (from Rs 387 per share) despite sharp fall in last two months. INDIAN STOCK TIPS

The share price has declined from a peak of Rs 480 to Rs 373 (22 percent) in last two months.

"Target price is based on 20x Dec-19E EPS (Rs 356) for business as usual (versus 24x earlier) less impact of Rs 60 per share from Vodafone-Idea merger (versus Rs 39 per share earlier) and likely acquisition of Vodafone-Idea stake in Indus at enterprise value of Rs 50 lakh per tower (+Rs 15 per share)," the research house said.

It further said the key reason for the de-rating is instant loss of tenancies on merger of Vodafone-Idea and impact of Reliance Communications and Aircel businesses’ scaling down.

This would push back Bharti Infrat…