IDFC Bank is an Indian banking company based in Mumbai, India. It offers a comprehensive range of banking services covering personal, business, and wholesale segments. IDFC Bank also offers its banking services in the rural parts of the country through IDFC Bharat Banking (IBL).Market Capitalisation
The market capitalisation of IDFC Bank, as of August 9, 2018, is a little over Rs.14,000 crore.
Company’s Wealth and Recent Performance
- For the quarter ended on June 30, 2018, IDFC Bank reported its overall net interest income (IDFC standalone + IBL) to be at Rs.444 crore - an increase of 20% with respect to the net interest income reported for the Q1 FY18.
- Non interest income, on the other hand, reduced by 14% to stand at Rs.123 crore at the end of Q1 FY19. Considering the operating expenses of the company, it increased by 17% with respect to the figure reported for the corresponding period last year. For the June quarter of FY19, the company’s operating expenditure stood at Rs.496 crore.
- The reduction in the aforementioned particulars dramatically affected the profitability of the company. The net profit after tax (PAT) for the June quarter was reported to be at Rs.192 crore - a significant reduction from a profit of Rs.438 crore reported for the same period, last year.
- The CASA ratio of the bank (Standalone + IBL) was reported to be at 11.30% - a reduction of a little over 0.5% with respect to the CASA ratio reported for the March quarter.
- Considering some of the key financial ratios, Return on Assets (ROA) reduced from 1.5% to 0.6%, y-o-y. The earnings per share also registered a similar drop from Rs.1.3 to Rs.0.6 at the end of Q1 FY19. The quality of assets, on the other hand, improved slightly in the period. Gross non-performing loans (NPL) reduced from 4.1% to 3.2% over the two June quarters.
IDFC Bank Limited Stock Trends in 2018
- On January 2, 2018, the opening price of the IDFC Bank shares was Rs.55 on the National Stock Exchange. In the first half of the month, the stock price of IDFC Bank rose dramatically to reach its 52-week high at Rs.70.40. However, this flashing rise was immediately followed by a bull run which resulted in the scrip incurring massive losses. On January 31, the closing price of the stock was Rs.56.80.
- Over the course of February, the share price dropped by another 8% or so, driven by unrest in the foreign markets. A similar trend was seen in the stock price of IDFC Bank Limited in the month of March as well. The scrip ended the month at Rs.47.30 - a drop of more than 10% from its value at the start of 2018.
- The month of April didn’t bring any relief to the investors. While the IDFC Bank shares didn’t incur any further losses in the period, they didn’t make any substantial gains either. Throughout the month, the share price of IDFC Bank varied at levels above Rs.47.
- It wasn’t until the month of May that the share prices slumped further. The scrip went down to be traded at levels below Rs.45 and towards the end of the month, it was seen moving closer to the Rs.40 mark. In June, the prices recovered slightly by around Rs.3, but they were still nowhere close to their previous levels.
- In July, the company announced a final dividend of 7.5%. Right before the announcement, the share price of IDFC Bank hit its 52-week low at Rs.35.80. The closing price at the end of July was Rs.40.05.
IDFC Bank Limited Stock Trends in 2016 and 2017
- At the start of 2016, the share price of IDFC Bank Limited was around Rs.59. Over the course of the next three weeks, the shares lost a little over 20% to touch the Rs.45 mark. Through the months of February and March, the share price fluctuated at levels varying from Rs.47 - Rs.54.
- In early April, the prices rose slightly as they attempted to reach their previous levels at around Rs.60. However, the efforts were in vain and the IDFC Bank Limited share price dropped through the second half of April.
- The scrip continued to go down in the months of May and June as well, with the closing price of June 30 being Rs.45.20. The month of July brought some reprieve to the investors as the prices rose and the scrip ascended back to its previous levels at Rs.50. A final dividend of 3% was also announced in the second half of the month.
- It is interesting to note that all the way from August to November, the stock price of IDFC Bank moved on to deliver excellent returns to the investors. This was the best bull run that the stock has incurred in its short history. From trading at levels around Rs.50 in early August, the shares soared to touch the Rs.80 mark by late October. This marked an increase of more than 50% in the stock price, in just three months.
- However, things changed dramatically post demonetisation as the shares ended up shedding their recently made gains. The scrip lost a little over 20% to end the year at Rs.60.05.
- The IDFC Bank Limited shares commenced 2017 at levels around Rs.60. Through the first quarter of the calendar year, the price didn’t vary dramatically. It varied at levels around Rs.60 without making any significant gains.
- A similar trend was also seen through most of April. It wasn’t until the final week of the month that the prices rose again, albeit it was by just 8% or so. For a week in May, the IDFC Bank share price varied at levels above Rs.65. In the second half of the month, however, the price dropped once again. This time, the shares descended back to their previous levels at Rs.56.
- In July, the company announced a final dividend of 8%. This announcement was in line with the rise in the share price during that period, which saw the scrip revisit its previous levels at Rs.64. However, this was the last discernible rise that the stock witnessed in 2017.
- Through the course of August to December, the stock price of IDFC Bank Limited dropped gradually. There were no sharp nosedives and the closing price on December 29, 2017, was Rs.54.25 - a drop of roughly 10% since the start of the year.
Should you invest in IDFC Bank Limited shares?
- IDFC Bank Limited is an Indian bank which is a part of the IDFC Group. Even though the group has been around for 20 years now, the bank is considerably new. IDFC Bank commenced its operations in October 2015 and listed its shares publicly in November that year.
- In just a little over two and a half years of its operations, the bank has managed to add 30 lakh customers and this number is set to increase in the coming years. Its CASA ratio stands at 11.30% as of June 30, 2018. For a bank that is relatively new, the company has done fairly well to solidify its position in the Indian market. Its network comprises more than 19,000 customer access points, and roughly 500 branches.
- It is also in the process of clearing the regulatory procedures and expanding its operations in the country. Its gross non-performing asset count is at around 3.2% - a remarkable drop from the Gross NPA of 4.1% reported for the June quarter of 2017. At the same time, for the Q1 FY19, the company’s net PAT was 56% lesser than the one reported for the corresponding period last year.
- If we look at the performance of the company with respect to its peers, it is ranked in the lower positions. Other players like HDFC Bank, Kotak Mahindra, and ICICI Bank are considerably ahead in terms of net interest income and net profit.
- However, being a bank that is fairly new in the sector, IDFC Bank Limited shares are available at attractive prices. The bank has also delivered regular dividends every year since its listing on the stock exchanges. IDFC Bank Limited shares are likely to serve well in a diversified portfolio. However, it is strongly recommended that you research thoroughly before investing in this particular stock.
IDFC Bank is an Indian banking company which provides a wide range of financial services like loans, investments, insurance, accounts and deposits, cards, wealth management, and forex. In addition to personal banking, IDFC Bank also provides banking solutions for businesses, corporates, entrepreneurs, and SMEs. Apart from the regular banking services, IDFC Bank has also created a separate unit - Bharat Banking, to focus on rural India and provide those areas with access to financial services.
History of the Company
IDFC was founded in the year 1997 with its registered office in Chennai. Shortly after its inception, the company registered with the Reserve Bank of India as a non-banking finance company and in 2000, it registered with the SEBI as a merchant banker. Over the course of the decade, the company stepped up its investment operations and moved on to set up five different subsidiaries to manage the same. The company primarily provided funding for infrastructure projects. In 2013, IDFC applied for a banking license and in 2014, RBI approved the same in principle. The bank formally commenced its operations in October 2015 and a month later, it listed its shares publicly on the National Stock Exchange and the Bombay Stock Exchange.
Management of the Company
Dr. Rajiv Behari Lall - Chief Executive Officer and Managing Director
Dr. Behari Lall, Ph.D., presently serves as the CEO and as the Managing Director of IDFC Bank Limited. He has held these two positions since October 2015. Over the years, he has been widely associated with the IDFC Limited, having served as its Chief Executive Officer and Managing Director. Prior to his spell with the IDFC Group, he worked with Morgan Stanley where he held various key positions. In addition to this, he also served as a Senior Economist at the World Bank. He has also worked with various other reputed organisations like National Securities Depositories Limited, National Stock Exchange of India Limited, STCI Finance Limited, and Uniquest Infra Ventures Private Limited. He is also the founder of Lok Capital Group.
Mr. Abhijit Sen - Independent Director
Mr. Abhijit Sen has been serving as the Independent Director at IDFC Bank Limited since July 2015. In addition to this, he serves as the Independent Director at Chokhani Securities Limited, and as the Chief Financial Officer and Chief Administrative Officer at KKR India. One of his most impressive stints was with Citibank, N.A. India, where he served as the Chief Financial Officer for 18 years. He also served as the Managing Director of CitiCorp, Finance India Limited. He is a graduate of Indian Institute of Technology, Kharagpur and holds a postgraduate diploma in Management from the Indian Institute of Management, Calcutta.
Ms. Veena Mankar - Independent Non-Executive Chairperson
Mrs. Veena Mankar has been a part of the finance industry for more than 35 years now and holds a great deal of expertise in trade, banking, structured financing, microfinance, and MSMEs financing. She joined the Board of Directors at IDFC Bank in July 2015 as an Independent Director. She is the founder of three entities which were created under the Swadhaar brand and presently serves as the Chairperson of two of them - Swadhaar Finserve Private Limited and Swadhaar Information & Management Services. She is an avid speaker and has been invited as a guest speaker for various national and international seminars and conferences.
IDFC Bank Limited Listings in NSE, BSE, and Indices
The equity shares of IDFC Bank Limited are listed on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. These shares are available to the general public for trading and can be bought accordingly. The respective codes for the same are as follows:
- BSE Code: 539437
- NSE Code: IDFCBANKEQ
- ISIN: INE092T01019
- Sector: Banks
As for the stock market indices, IDFC Bank Limited forms a part of the following:
- NIFTY 200
- NIFTY 500
- S&P BSE 200
- S&P BSE 400 MidSmallCap Index
- S&P BSE AllCap
- S&P BSE LargeMidCap
- NIFTY Midcap 100
- NIFTY Midcap 50
IDFC Bank Limited
No. 1, Harrington Road,
Chetpet, Chennai - 600-031
Tamil Nadu, India
Contact number: 044-4564-4000
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