Jefferies on @bandhanbank_in
BUY
TP Rs400 from Rs470
Higher NPLs; Risks From Covid 2 Drive Earnings Cut
Weak profit as expected, but NPLs disappoint
Disappointed by higher slippages
Faces credit risks from lockdowns
Cut est by 13% for FY22E & 11% for FY23E
Valtns are reasonable

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ICICI Sec on @bandhanbank_in
BUY
TP Rs465 from Rs501
Portfolio vulnerability comes to fore
Contingency buffer utilised in Q4FY21; not enough cushion left
NPA toll in Assam & WB marred Q4FY21 earnings
Bank didn’t pull back on growth despite a challenging year on asset quality

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ADAG lovers

RPower as we know it was one of the blockbuster IPOs of its time. With an issue price of ~ ₹405 to ₹450, it enjoyed a Market Capitalization of roughly ₹1L crore those days.

However during the IPO, the company *LITERALLY* had no business. Zero Portfolio of generating Power. Needless to say, EXTREMELY overvalued.

Anil Ambani tried to please the shareholders by issuing Bonus shares, thus taking the number of *Equity shares of R.Power to 280.5 cr*

Irrespective of the rising debt and coming up of various, RPower has NEVER gone for Equity dilution. They've solely relied on debt to finance their projects. Good Move IMO.

Due to the piling debt and R.Com issues, RPower suffered a MAJOR fall. Add to that, since AA (Anil Ambani) had pledged shares for raising debt, the banks invoked the pledge and sold off the shares in the open market to recover their Debt, thereby drastically reducing the promoter's stake in RPower. L&T finance started dumping shares in the open market which lead to this massive fall, followed by YesBank, Axis Bank, IDBI Trustees and so on. Hence the share price hammered.

On March 26, 2021, RPower made a LIFETIME low of ₹1 (a M.Cap of JUST ₹280.5cr).

The main thing is people have ignored RPower because of AA's name now. They often miss the fact that now RPower has an operating portfolio of *5960 MW* (approximately 6 GW). RPower has since the 2 precious Quarters been able to come into consecutive profits.

Total Liabilities of RPower: around ₹22k cr

Total assets of RPower: (Going bye replacement cost theory of Power sector, 1 MW = ₹10cr) so 6000MW = ₹60k cr worth of assets. Heck, even if it's ₹7 cr per MW, it'd be roughly ₹42k cr.

It was having issues servicing debt in the past BUT now it's been able to do so since the last 3 quarters, albeit slowly. Wilful defaulting on debt so that debt restructuring can be done (NOT Capital restructuring, mind you). They're doing everything to cut debt now.

RPower's main issue was VIPL (Vidarbha Power Industries Limited) (Butibori Plant) being non-operational, their captive coal mines being not so functional due to the regulatory policies of our Indian Government AND Samalkot Plant being partly non operational due to Gas constraints in that region. Today only, a portion of Samalkot Plant got sold to fetch ~ ₹1,200 cr in addition to ₹2,000 cr committed by the company to further deleverage themselves. They're also working on restructuring the debt (NOT NCLT) (No Equity Dilution either since that'd be senseless to do so, I'll explain later)

Now speaking WHY it's so *DEEPLY Undervalued:*

Valuation front:
R.Power's Book Value is ~₹47, meaning the stock is trading at a discount of ~90% from that of it's Book Value. (0.09x of B.V to be precise)

June Qtr: ₹1 cr Loss
Sep Qtr: 105.6cr Profit
Dec Qtr: 52.59cr Profit

Total Profit till now: ₹161 cr which when divided by 280.5 cr shares bringing this FY's EPS to ₹0.57.

Do note, March Quarter's results to be declared. Even if the profit is ₹50cr this Qtr, that'd bring the EPS to ₹0.71 for this FY. Power Generational sector has a Sectoral P/E of 15 meaning ₹15 (F.V) is EASILY doable from such levels.

Now the *MAJOR Turnaround* news:
We recently saw this news on Govt of India considering selling of captive coal mining operations to the tune of 50% of their operational capacity. Why is this a breakthrough for RPower? I'll explain:

*R Power holds 3 captive coal mine blocks MOHER ( largest coal block in India ). MOHAR Amlohri and CHATRASAL with capacity of 20 million ton per year for the three . If they sell 10million ton it will be a big cash flow. (to the tune of ~ ₹3k cr approximately)* Just imagine how much profits would the company generate now.

Also, Bangladesh Project coming up in two Phases. Total 3000MW (3GW) thereby taking the total portfolio to a staggering *9GW.* Expected to come up sometime next year.

Also, VIPL resolution taking place. It'd (600MW capacity) most likely be sold to Adani's or found a way to make it operational.

Today only in the regulatory filing, RPower said it'd reduce debt by upto ₹3k cr this year. *Further deleveraging*. Guys just think of this. Debt reduction of 3k cr means *reduction in interest burden by ~300 cr per annum.* Count that as ₹300 cr profit per annum or ₹75 cr extra profit per annum.

*Direct jump of EPS by ₹1* 😊😊😊

A plethora of other good news in the pipeline:
1) R.Com resolution
2) RInfra becoming debt free
3) Promoters announcing increasing stake in the firms.

Just imagine the insanely deep undervaluation this stock possesses.

During IPO, zero portfolio. Today when it's available at even lesser than 1/100th of the valuation, nobody wants it (Inspite of it having a 6GW operating portfolio). The moment Current Assets And Current Liabilities wide mismatch of ₹10k cr fixes, the Stock would reflate in no time.

I missed to buy this GEM at ₹1. But no worries, I caught it at ₹4. Heck, even below ₹10 or even ₹15 it's deeply Undervalued, let alone ₹1. Two companies with ALMOST CERTAIN chances of survival: RInfra & *RPower.* 😊

Provided things go as planned, in the long run, RPower even possesses the potential reach

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a very beautiful answer to the foolish lady from the educated lady 🤣


NDTV: Why Tax Vaccines, Nirmala Sitharaman Explains After Mamata Banerjee Note.
https://www.ndtv.com/india-news/covid-19-after-mamata-banerjee-letter-nirmala-sitharaman-explains-tax-on-vaccines-2438283#publisher=newsstand

Selling

Fincare Business Services(Holding company Fincare small Finance Bank)

Total Quantities - 5 Lakhs.

Share Price - 103(1 Lakh lot size), 107(25k Lot Size)

ISIN - INE957R01017

ROFR Shares

It Will takes 2 to 2.5 months for the transaction.

For more Details please connect

https://m.economictimes.com/markets/ipos/fpos/fincare-sfb-to-file-ipo-papers-this-week/articleshow/82448056.cms

Plus advance introductory fees payable to us@2/sh

Interesting Ranting on crypto 😄

https://www.getrevue.co/profile/yourtipsheet/issues/it-s-not-about-money-it-s-about-sending-a-message-590052