So many terminologies in Banking!

Confused?😥🤔

Dont worry.

A thread🧵 on basics of Banking

Hit "Retweet" to educate Maximum Investors

Lets go👇

(1/20)

Types of banks:-

Your money should be parked in scheduled commercial Banks

Scheduled Commercial Banks
-PSU Banks
-Private Banks
-Foreign Banks
-Small Finance Banks

Do not park money is Co-operative/Regional Banks

List is shown below

(2/20)

NPA, NPA, NPA! Kya hain yeh NPA?🤔

Gross NPA (GNPA)-

It is the total loans on which no payment has been paid for 90 days or more.
GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances.

(3/20)

Net NPA (NNPA)-

The total figure left after deducting provisions made for bad loans from GNPA.
(GNPA – Provisions+upgrades/writeoffs = NNPA)

(4/20)

Special Mention Account (SMA) –

SMA-0

SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days.

(5/20)

High Copper Prices Are Terrible for EV Makers. This Company Has a Fix. https://t.co/kWu59AUGO1 via @BarronsOnline

HDFC Bank has announced a merger with HDFC Ltd

What does it mean for the banking system and the shareholders of both companies?

A thread🧵explaining the pros and cons of the merger.

Hit "Retweet" to educate maximum investors

Lets go👇

(1/19)

What is happening?

HDFC Bank will take over HDFC Ltd....effectively making a huge bank

25 shares of HDFC ltd will receive 42 shares of HDFC Bank.

(2/19)

Potential to be India's largest Bank?

HDFC Bank+HDFC total size=18 lakh crores
SBI total size=26.5 lakh crores

With steady loan growth over the next 5 years....surely HDFC Bank will become the largest bank

(3/19)

Housing Finance is a big opportunity and the missing puzzle in the HDFC Bank armor:-

Over the past year ICICI scored big time on HDFC Bank due to rapid growth on home loans.
ICICI clocked up about 24% loan growth while HDFC Bank did not have a home loan portfolio.

(4/19)

So why merge now?

The regulatory arbitrage b/w Banks and NBFCs is slipping away:-

The IL&FS crisis hit the economy really hard.

Since then the RBI has taken various steps in NBFCs:-
1. Asset classification norms for NBFCs have been moved at par with that of banks.

(5/19)

From HDFC Bank to Kotak to Bajaj Finance to Canara Bank!

How did lenders perform in Q4FY21?🤔

A thread🧵on the Banking/NBFC results

Hit "Retweet" to educate maximum Investors

Lets go👇

(1/24)

HDFC Bank:Stable

🏦Profits grow at 18.2%
🏦Asset quality remains stable with credit costs at 1.65% for the quarter
🏦CAR at 18.8%
🏦Gross NPAs at 1.32% vs 1.38%
🏦HDB Financial returns to profits
🏦Watching carefully on how the second wave will turn out

(2/24)

ICICI Bank Results:-Stable

🏦Operating profit grows at 20%
🏦Covid-19 provisions increased by 1000cr to 7475cr
🏦Deposits grow by 21%
🏦Net NPA declines to 1.14%
🏦Capital Adequacy at 18.06%
🏦Retail loan growth at 20%
🏦Corporate loan growth at 13%
🏦Dividend-Rs 2/share

(3/24)

Cholamandalam Investment:Stable

🏦Disbursements decline 13%
🏦Loan loss provisions at 1.4%
🏦Profits up 29%
🏦Positive on Auto financing

(4/24)

HDFC Ltd:Strong

🏦Loan disbursements grow 60%
🏦Month of March had highest ever disbursements
🏦Gross NPAs at 1.98%
🏦Individual loan NPAs at 0.99%
🏦Non-Individual Loan NPAs at 4.77%
🏦Dividend of Rs 23/share
🏦PAT grows by 19%

(5/24)

Index Funds have been a red hot equity passive Mutual Fund strategy in the last 10 years!

A thread🧵explaining why index funds should be a part of ur equity MF portfolio!

Hit "Retweet" to educate maximum investors

Let's go👇

(1/18)

Passive vs Active Mutual Fund Strategy

Active Strategy:-

Active investing, as its name implies, takes a hands-on approach and requires that someone act in the role of a portfolio manager.

The goal of active money management is to beat the stock market’s average return

(2/18)

Passive Strategy:-

Passive investing entails a non-active role on part of the investor.

When you invest in a diversified portfolio with low costs and a long-term horizon, it tends to deliver returns comparable to the market average.

(3/18)

What are Index Funds?

Index Fund invests in stocks that imitate a stock market index like the Nifty, Sensex.

These are passively managed funds which means that the fund manager invests in the same securities as present in the underlying index in the same proportion.

(4/18)

The relentless rise of Index funds:-

The assets under management (AUM) of passive products will grow eight times from the current levels of ₹3 trillion to ₹25 trillion by 2025

Passive assets will grow to constitute 37% of the overall assets in the MF industry by 2025

(5/18)

When the upcycle in a sector is very strong
Poorly managed companies also make returns

2021 steel cycle-
SAIL went up from 30 to 120

Now in the current credit upcycle:-
PSU Banks are making money!

But does this mean credit culture has changed for PSU Banks?
No evidence of that

Aadhar
UPI & now
Open Network for Digital Commerce(ONDC)

As ONDC starts testing in Bengaluru!
ONDC is yet another UPI moment(game changer) in e-commerce

A thread🧵on what is ONDC? How will it revolutionize e-commerce in India?

Hit "Retweet" to educate people

Lets go👇

(1/21)

How Big is India's e-commerce market?

In India, the Gross Merchandising Value (GMV) for the digital commerce retail market was ₹2.85 Lakh Crores (US$ 38 billion) in 2020.

(2/21)

Kirana Stores are physical in Nature:-

In India, around 1.2 crore Kirana stores, which are hyperlocal neighborhood provision stores, account for 80% of the retail sector, but most of these stores are digitally excluded.

(3/21)

India had 4.25 crore Micro, Small and Medium Enterprises (MSMEs) that could benefit from the digital revolution, the paper adds.

(4/21)

Currently, only about 20% of internet users in India are online shoppers.
By 2030, we can expect this to grow to nearly 50 crores,

(5/21)

Parag Parikh Flexi Cap has been an investor favorite over the past 2 years.

Should u chase the fund?

An in-depth thread🧵 analyzing the performance and strategy of the fund.

Hit "Retweet" to educate maximum investors.

Lets go

(1/20)

Scheme:-
Parag Parikh Flexi Cap fund

Fund Manager:-
Mr Rajeev Thakkar

AUM:-
29,294cr

(2/20)

PPFAS has been the vision of the great Late Parag Parikh.

A true Value Investor.....who lost his life while attending a Berkshire Hathway AGM.

The Mutual fund has tried to remain true to the investing concepts laid by Late Mr Parag Parikh.

(3/20)

Fund Manager:-

Mr Rajeev Thakkar possesses over 15 years of experience.

Joined PPFAS in 2001.

Rajeev is a strong believer in the school of "value-investing" and is heavily influenced by Warren Buffet and Charlie Munger's approach.

(4/20)

Mr.Thakkar is a Chartered Accountant, Cost Accountant, CFA, and CFP. He has been associated with PPFAS AMC since 2013.

Mr Thakkar has been the lead fund manager at PPFAS Mf ever since launch.

(5/20)

How will next 10-15 years be different for India?
In the next 10 years,India will undertake massive infrastructure projects which will propel India to a $5 Trillion economy

A thread🧵on how India is spending big on Infrastructure upgradation like never before

Lets go👇

(1/17)

How big is India's Infra push?

India spent $14 Trillion on infrastructure in the 75 years since its independence.

$7 trillion was in the last 9 years.

Another $7 Trillion will be spent in the next 9 years!

Big Big Spending is coming in!

(2/17)

So where is this money being spent?

1. Roads
There has been an increase in the construction of National Highways (NHs)/roads over
time, with 10,457 km of roads constructed in FY22 as compared to 6,061 km in FY16.

(3/17)

In FY23(until October 2022), 4,060 km of NHs/roads were constructed, which was around 91 per cent of the achievement in the corresponding period of the previous financial year

(4/17)

The ambition is to take the rate of daily highway construction in India to 100km per day

Dubbed India’s ‘highway revolution’,
Rapid highway construction is central to the country’s push to transform itself into a staggering US$5 trillion economy by 2025.

(5/17)

A very pertinent question investors ask:-

"When to sell a stock?"

A small thread🧵which can help u in this process

Hit "Retweet" to educate maximum investors

Lets go👇

(1/20)

First things first:-

There is no set methodology to decide when to sell a stock.

Everybody has their own framework.

These are just some pointers that work for us.

One should create their own framework

(2/20)

Many investors have an anchorship bias.

They never sell in loss even if the fundamentals are deteriorating.

Numerous examples like Yes Bank,DHFL,Vodafone Idea can be seen where retail investors are now stuck.

Don't shy away from admitting mistakes and taking losses

(3/20)

So when to sell a stock?

1. Framework for investment not working out:-

Fundamentals of the company deteriorate:-

When we invest in a company....we create a broad vision of how the targets the company will achieve in the next 3-5 years.

(4/20)

Each quarter we just make sure that the company is slowly moving toward the guided path.

There can be delays due to business realities.

If the company completely digresses from the required path!

Eg:-

Since 2018,Sterlite tech saw a sharp deterioration in fundamentals

(5/20)