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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
The CEO may have turned around a bank that was in the grips of corruption at the grassroots, but can he make it one of India’s top five private banks?
Editor's note: Federal Bank chief executive Shyam Srinivasan isn’t happy. Since January, the bank’s shares may have soared 53%, almost 3x the growth in the Nifty Private Bank index. But he wants more. “I still think we have not been rewarded as well as we should for the performance,” Srinivasan recently told The Economic Times. The CEO of the Aluva-based bank has a point. With Srinivasan at the helm for the past 12 years, the private sector lender, once plagued by grassroots-level corruption and unionism, has grown its deposits 1.5x and advances 1.6x vis-a-vis the industry. However, during the same period, the bank’s stock jumped 322%, just short of the Nifty Private Bank index’s 359%. Based on the bank’s September-quarter results, brokerages still expect its shares to rise 10-31% from its current levels. The key question is: Are the markets not rewarding Federal Bank enough? Maybe. With a price-to-book ratio of 1.42, it is still undervalued compared with its peers—a chink in the bank’s otherwise impressive performance under Srinivasan. The ratio measures the market value of a company relative to its book …
The central bank’s shift to a 100% collateral requirement threatens to erode leverage, reduce volumes and force a consolidation across prop desks.
High returns, RBI-regulated comfort, and easy withdrawals drew investors in. Now, with repayments drying up, the fintech platform, its NBFC partner, and the regulator are pointing fingers—leaving customers to chase their own money.
The RBI’s unusually harsh order raises deeper questions about management credibility—and whether investors should take assurances at face value.
