MARKET EYE-Valuations of India's non-financials look stretched

Mon Dec 17, 2012 2:11pm IST

Related Topics

Stocks

   

* Valuations of Indian non-banking financial companies are
beginning to look stretched, after surging this year on hopes
parliament will approve a bill laying the groundwork to issue
banking licences for the sector, analysts have said. 
* Likely contenders to obtain banking licences are trading at
much higher price-to-book valuations than established private
sector banks such as Axis Bank and ICICI bank
.
For graphic: link.reuters.com/qam64t
* Shares of NBFCs have surged this year, with L&T Finance
Holdings gaining 109 percent as of Friday's close, and
Shriram Transport Finance rising 74 percent. Mahindra
and Mahindra Financial Services has risen 78.5
percent.
* That's well above the broader NSE index's 27.2 percent
gain, and the gains made by private banks such as ICICI Bank
, which has risen 65.9 percent.
* Passage of the bank amendment bill, which is being debated in
the winter session of parliament, due to end on Dec. 20, is a
pre-condition for awarding licences. 
* "Its insanity. I think when the actual licenses are awarded we
will sell on news on these counters," said G. Chokkalingam,
executive director & chief investment officer at Centrum Wealth
Management.

 (abhishek.vishnoi@thomsonreuters.com /;
abhishek.vishnoi.reuters.com@reuters.net)
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

U.S. Economy

U.S. Economy

Spectre of no-inflation world looms over Fed's return to normal  Full Article 

Insider Trading

Insider Trading

Rengan Rajaratnam, SEC to settle civil insider trading charge.  Full Article 

Market Watch

Market Watch

Betting on the beaten up? Investors pin hopes on stocks in Europe, Japan.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage