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AlphaIdeas

Alpha Ideas finds a mention in Economic Times

There is an interesting article on unlisted scrips in today’s Economic Times.

Alpha Ideas finds a mention in the article :

“Buy unlisted companies where the promoter pedigree is strong, and which have some compulsion to go public over the next two to three years,” says Nitin Rao, of alphaideas. in, a blog which spots options in the unlisted space. The promoter pedigree is something everyone pays a premium these days. “There have been several instances where companies offloaded shares to investors and just disappeared.

Experts also ask investors to pick only those companies that are closer to the IPO stage. “Many companies have compulsions from existing private equity shareholders to go public. Or they have to follow regulator guidelines to have a wider shareholder base,” says Rao.

He recommends Ratnakar Bank and BSE, which he feels have a strong pedigree and will go public in the next two to three years. Ratnakar Bank’s top management team consists of experienced bankers from foreign and private sector banks. PE funds have invested in the bank in January 2013. The bank is on an expansion spree and has merged RBS’ retail banking.

It is likely to go public soon. The BSE has allotted shares to its brokers, PE funds and other institutions, at a price of Rs 400 per share in 2007. He feels there is a high probability of it going public in the near future.

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Aberdeen:India Favored Amongst Emerging Markets

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Tweets

A Big Ask

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Links

Linkfest:04 April,2014

Some stuff I am reading today morning:

Equities for the long run?Or property?Or neither? (Moneybeat)

Examining the edge of the discretionary trader (TraderFeed)

Adani Power becomes India’s largest private power producer (ET)

Bandhan founder Ghosh is confident despite challenges (Mint)

The IPL juggernaut is steady (BS)

Why Rahul Gandhi is no son of Amethi (FirstPost)

The perpetual bubble economy (NYTimes)

The language of Indian politics (Bloomberg)

Applying Dogs of Dow theory to Emerging Markets (Street)

The best and worst thing about investing (TRB)

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Excerpts

UK Based CDC Group invests $28 Million in RBL Bank

(Disclosure:I am market making in RBL Bank)

UK-based CDC Group has invested $28 million (Rs 167.3 crore) in private sector lender Ratnakar Bank, a transaction that will see the British development finance institution pick up a 4.8% stake in the Kohlapur-based, private equity-backed bank.

The proceeds will be used by Ratnakar Bank to expand its operations in newer geographies. The investment is also the first direct equity transaction in a bank entered into by CDC under its new investment strategy that was unveiled last year.

“We greatly value the confidence CDC has reposed in our strategy and our commitment to building a sustainable bank that has as one of its key objectives to providing financial services to the larger under-banked and unbanked parts of India,” said Rajeev Ahuja, head of strategy at Ratnakar Bank.

Ratnakar Bank, which has been undergoing a transformation to be a pan-India player, has been pursuing an expansion-focused strategy, based on financial inclusion, agribusiness financing and lending to small and medium-sized enterprises. It has a total business size of over $3.5 billion (Rs 20,917.8 crore) and offers its services to over 5 lakh customers, according to a press statement released by the company.

” We view this is as a unique opportunity to invest in an institution which has a real prospect of becoming a platform serving a population that CDC wants to reach and fostering financial inclusion, financing of SMEs and agribusiness,” said Srini Nagarajan, regional director – South Asia, CDC.

The private sector lender will now look to expand its services into a number of India’s poorer states, including, Rajasthan, Madhya Pradesh and West Bengal, where the penetration of financial services has, historically, been amongst the lowest in the country.

“CDC is strongly aligned with RBL Bank’s strategy to expand and provide a range of financial services to customer segments that are under-served by the market, and our stable investment approach will complement the company’s strong management team as they continue to implement the bank’s growth strategy,” CDC’s Nagarajan said.

The Indian banking sector is growing at a rate of 14% to 16% per year. However, according to reports published by the World Bank, more than two-third of the country’s population are yet have access to formal financial services, a massive hurdle that severely limits their ability to plan, save or borrow to improve their economic prospects.
“The potential impact of RBL Bank’s growth is significant. The bank’s branch network is set to double in five years, creating thousands of jobs, and we also anticipate significant job creation in semi-urban and rural areas through the agri-value chain financing and SME lending activities,” said Holger Rothenbusch, managing director – debt and financial instruments, CDC.-from ET