Really. Does the price of a stock and its movement vis a vis index or sector give indicators that there is something fishy.
I read a article by meher, a very detailed one. After reading that it would be impossible to adjudge fishy or not
Going by this logic hdfc going by its price movement must be a rotton fish by now, same with kotak,
I used to hold both and thankfully exited kotak.
Would like ro know your premise how to judge a bank not doing the correct thing as per regulations.
As per the near flawless article by meher it was RBI new regulation which put spanner in their process. If not they would have written off the losses in many future quarters.
If Rbi, external auditors, internal auditors could not do much, how can a price movement within index, sector can be used to figure out there is something wrong in a bank.
This issue was on going for few years now but had to be crystallised due to rbi new rules.
Yes bank. Did anyone knew that this will go to moratorium?
I maybe wrong but it would be nice to know the reasoning.
Rbi slapped kokat one of the supposedly clean and astute bank on credit card. Something similar was done to the great hdfc.
These things happen i guess.
Things will go wrong if there is a run on the bank. Till now nothing i believe. Hope nothing as well.
@neha1101 The stock has fallen as much as it did, because there is a large section of investors that believe there maybe more than whats revealed. Otherwise this issue (as stated) doesnt warrant this much dumping. There will always be sceptics and believers - often truth lies in the grey zone…
Honestly when two top executives dump majority of their shares, its not a good look. I have seen this happen before, and its usually not a good sign.
Btw IndusInd Bank is around the same price it was in 2014. If the current fiasco is the only thing hampering IndusInd it could well be a good bargain for new investors… But is it?
This curious case of Indusbank really shows how important it is to have effective internal controls and risk management systems. Identification of such errors in financial institutions can greatly affect their reputation.
yup. Single day movement like that doesn’t look good in my experience. Insiders selling large stake before, just general stock movement after 2020 vs everything else. Market thinks its fishy. With banks, this is esp more risky as they are leveraged.
Market can be wrong too, but is often right. I have been here before when i was ‘investing’ in ‘value’ stocks, much worse than this one. Being emotional or defensive about it, or just selectively looking for things that confirms what you want isn’t going to help.
Market doesn’t care what me or you or meher thinks.
Uncertainty is part of life in stocks. Nobody knows for sure if there is more except insiders. But once market starts not trusting, it wont be easy to get high valuation for a company.
Yes nothing is certain. Else stock price would be going towards 0 or straight up to where it ‘should’ be. From his own article what i got is - there is issue, seems small, market thinks or fears that it could be more, even if all is well it would be difficult/time consuming for people to trust it again.
I have no stake in this, hopefully it goes back up else i will have 1 less stock to trade. Good luck.
In continuation to the Yesterday’ 's replay , Following RBI Rules about Share Holding limits in a particular Bank affected the promoters like Kotak Mahindra Bank & Indus Ind Bank , No promoter cannot do effective Management by holding less then 26% , so probably Indus ind Bank promoter holding is less then 20% and probably no more interest in running the Bank , After the RBI rules Kotak Mahindra Bank stock price is in a range from a long time & not doing good . May be like Yes Bank other lined up banks are Yes Bank , Kotak Mahindra and Indus Ind bank
Shareholding limits
Promoters: After 15 years, promoters can hold up to 26% of a bank’s paid-up share capital
Non-promoters: Natural persons, non-financial institutions, and financial institutions can hold up to 10% of a bank’s paid-up share capital
Financial institutions, public sector undertakings, and the government: Can hold up to 15% of a bank’s paid-up share capital
Approval requirements
Anyone who wants to acquire a major shareholding in a bank must get prior approval from the RBI
The RBI’s decision to grant or deny approval is binding on the applicant and the bank
Lock-in periods
Shares acquired between 10% and 40% of a bank’s paid-up equity share capital must remain locked-in for five years
Shares acquired at or above 40% of a bank’s paid-up equity share capital must remain locked-in for five years, but only 40% of the shares
The RBI may permit higher shareholding than the above limits on a case-by-case basis.
hey, that’s all fine, but its out of our control. So some losses might happen due to fraud as well for an investor in stocks. Probably happens to the best of them too.
So we cant assume that there isn’t going to one, that’s all. Rest is fine, some profit some loss, with hope that net is competitive with basic buy and hold.
It can indicate possibility, market keeps trying to guess correct value of stock. I never said that there is 100% fraud and more is coming.
Even if there isn’t one, whos to say that the fall is wrong. Perhaps high price was wrong and current price is right ?
I have seen multiple times, that for a layman to ignore market fears/pessimism in an individual stock, esp against rest of the market, is generally a folly. Even if price doesn’t go down, upside may not be great. I would definitely ignore what insiders say when such things happen, their interests may not be aligned with ours. Time till tell.
This does not apply to a specialist who knows what he is doing and takes a bet either with or against the market.
Don’t worry. Not missing out on any unique insight beyond what’s already discussed in this thread.
The article has some dates and numbers. Proper factual reporting.
he Reserve Bank of India (RBI) on Saturday (March 15) issued a statement addressing speculation regarding IndusInd Bank Ltd, stating that the bank remains well-capitalised and financially stable.
Rbi is asking all banks to certify that they are following the correct accounting procedure. This news was not available in any of the articlesand that is new to me.
