IDFC a very good pick from a long term perspective: Mayuresh Joshi

In a chat with ET Now, Mayuresh Joshi, VP-Institution, Angel Broking, shares his views on the IDFC. Excerpts:

ET Now: What could be the implications of this QIP on IDFC because post QIP the book value surely will shot up?

Mayuresh Joshi: Yes, the whole intention again would be to basically get the norms as per the RBI guidelines for the banking licence. One needs to understand that even if it forays into the banking space and there is a lot of capex put in on branch expansion and so on so forth. The ROEs might get subdued initially and again the kind of loan book that IDFC currently has, a lot of emphasis has been laid on refinancing and we have seen a little bit of deterioration in asset quality. Long term investors with a three to four year horizon can definitely have a look at the stock. Well capitalised scenario, asset quality quite stable and banking foray over the next three to four years would augur well for the institutions. So IDFC remains a very good pick from a long term perspective.