SP Tulsian`s view on HDFC Warrants

SP Tulsian, sptulsian.com shares his view on HDFC Warrants.

Tulsian told CNBC-TV18, “HDFC Warrants, 16% fall is obviously in relation to the share price. If share price falls by Rs 6 you will see an equal fall in warrants by that amount only. But looking to the Keki Mistry, it is not necessary to accept that the research reports which are released are always seen as correct, because that has happened in case of MSCI also where they have erred in taking the foreign holdings at 100% and then they have agreed to rearrange the weightage of the HDFC in the MSCI.”
He further added, “Coming on this Macquarie and hearing the Keki Mistry he has categorically said that the income or the profits of the associates to the extent of Rs 1,400 crore has not been booked by HDFC and equal and corresponding to that investment on which the interest liability of Rs 465 crore has also not been booked and coming on the ROE that the ROE is boosted by the corporate debts again I am unable to understand because that has been the practice of HDFC. I don’t know the mix of the individual and non-individual, because HDFC has been financing. If you take the case practically I tell you suppose there are 50 builders in Bombay. Half of them are availing the construction finance from HDFC, so that necessarily falls into the corporate category and that has been the practice for last 25 years if I recall."
"So I am unable to understand what is the mix and why that has been concerned and as Keki has said that NPA is higher in case of the corporate finance than in case of the non-corporate finance to the individual category. I am unable to accept the price targets and all that. One has to keep close watch on these reports and developments whether any kind of rectifications are carried out by HDFC in their subsequent accounting then only, because just going by this one report I won’t be taking a negative call on the stock.”