EXECUTIVE SUMMARY. According to the grand theory of capitalism and the free market, competition anoints the customer as king. In the capital market, it is argued that increasing the number of players would improve price discovery, and greater scrutiny of managements’ conduct would discipline them. Thus the market would...
The Securities and Exchange Board of India (SEBI)’s order dated June 30, 2022 indicted not only the senior-most executives of Kotak Mahindra Mutual Fund (KMF), but also Kotak Mahindra Trustee Company (KMTC), for failing in its oversight of the asset management company. The matter related to KMF’s investment in...
EXECUTIVE SUMMARY. Yes Bank is in the news for its non-performing assets, a legacy of erstwhile founder-CEO Rana Kapoor’s reckless lending being transferred to an Asset Reconstruction Company (ARC). If and when the deal is announced, the balance sheet and the bank will be absolved of the sins of...
EXECUTIVE SUMMARY. When private bank stocks languish, or worse, spiral downwards, it is not just shareholders whose wealth erodes. Senior management executives, the elites in the private financial sector, also grievously suffer, as much of their personal wealth may be tied up in employee stock ownership plans (ESOPs).
When the...
EXECUTIVE SUMMARY. The phenomenal success of HDFC Bank under the stewardship of Aditya Puri, its first CEO, had some unfortunate consequences. It led to a belief that the recipe for achieving a premium valuation was to employ larger-than-life Alpha leaders who promoted an aggressive work culture, imposed long working...
EXECUTIVE SUMMARY. Axis Bank’s acquisition of Citibank India’s consumer finance division has been applauded by the stock market, and the bank has outperformed Nifty-50 and the Bank Nifty since the announcement.
However, Axis Bank shareholders need to be more cautious about whether the acquisition will deliver the returns that the...
EXECUTIVE SUMMARY. Many cases of mis-selling by ICICI Prudential Life (IPru Life) have been highlighted by this analyst since 2018 (also here and here). The company has responded by highlighting the high and improving persistency ratios (proportion of business that is retained from the business underwritten, measured in terms...
EXECUTIVE SUMMARY. The argument made at the time of opening up the life insurance sector and allowing the private sector was that doing so would increase life insurance penetration (life premium/GDP) and thereby increase long term savings, which would flow into infrastructure investments (which are inherently long-term). But despite...
EXECUTIVE SUMMARY. In order to protect its customers from mis-selling, ICICI Bank ceased the selling of traditional par and non-par life insurance policies even from its subsidiary, ICICI Prudential Life Insurance (IPru Life). However, the bank continued to sell Unit Linked Insurance Policies (ULIPs). Sadly, feedback from ICICI Bank...
