HDFC can do well with some arrangements: Sudip Bandyopadhyay

In a chat with ET Now, Sudip Bandyopadhyay, President, Destimoney Securities, shares his views on HDFC bank.

ET Now: I have a question on one more large cap -- HDFC Bank has not seen a run-up and we all know the reasons, no FII buying possible. Now, they have sought shareholders nod to increase the FII limit, does not mean they can do it but they have sought shareholders nod and they have also made a provision in this AGM to get an approval for raising money, up to a sum of Rs 10 thousand crores. Are these precursors to maybe some bit of fund raising which will eventually bring the FII holding down and therefore FIIs can buy more and therefore a stock could go up as well, do you think all of this could happen in HDFC Bank?

Sudip Bandyopadhyay: It can happen but I would like to point out one more factor other than what you mentioned. While if the FII limit was there, HDFC should have seen little bit of run-up but the relative undervaluation, relative valuation gap in HDFC Bank was much-much lower compared to an Axis Bank or an ICICI Bank and of course the entire PSU basket. HDFC Bank has been providing excellent steady returns and steady results over the last many-many years. It is a great company but the valuation gap, the opportunity did not exist that much in HDFC Bank. Of course, it got further complicated or subdued or restrained by the fact that FII could not buy HDFC Bank stock.