IDFC Limited, also known as Infrastructure Development Finance Company, is a non-banking financial company which primarily provides financial and advisory services for infrastructure projects. It is also involved in asset management, brokerage, and investment banking.Market Capitalisation
The market capitalisation of IDFC Limited, as of August 16, 2018, is a little over Rs.7,900 crore.
Company’s Wealth and Recent Performance
- For the year ended on March 31, 2018, the consolidated total income of IDFC Limited was reported to be at Rs.11,161.2 crore, as against an income of Rs.10,402.06 crore reported for the previous fiscal year. This consolidated income amounts for all the subsidiaries of the company such as IDFC Bank Limited, IDFC Securities Limited, IDFC Asset Management Company, et cetera.
- The consolidated profit after tax for the FY18 was reported to be at Rs.589.65 crore, as against a profit of Rs.699.09 crore reported for the corresponding period, last year. This decrease in profit came on the account of a sizeable increase in expenses for the year.
- Similarly, the company’s earnings per share also dropped from Rs.4.38 to Rs.3.69.
- For the June quarter of the FY19, IDFC Limited reported its standalone total income to be at Rs.18.35 crore, as against an income of Rs.16.6 crore reported for the same quarter of the previous year.
- As for the total profit for the quarter, it was disclosed to be at Rs.2.97 crore. This marked a slight decrease in profit, y-o-y, owing to an increase in the expenses for the June quarter.
- Considering the performance of its subsidiary IDFC Bank Limited, its net interest income for the quarter was Rs.444 crore while its profit after tax was Rs.192 crore. While the net interest income improved by 20% y-o-y, the profit after tax suffered massively over the same period and was down by 56%.
IDFC Limited Stock Trends in 2018
- On January 2, 2018, the opening share price of IDFC Limited stocks was Rs.63.30. Over the first half of the month, the shares traded hands at levels close to its 52-week high of Rs.68. The prices suffered dramatically in the second half with the shares losing as much as 15%. The closing price on January 31, 2018, was Rs.56.35 on the NSE.
- The Indian markets were quite uncertain in the month of February as they found themselves plagued by the turbulence in the international bourses. As a result, the stock price of IDFC Limited varied at levels ranging from Rs.50 - Rs.54 in the month.
- In March, the share price went down further by 5% or so. While the drop wasn’t that dramatic, the investors still incurred losses on their investments. The share price went down to enter the Rs.40 territory with the closing price on March 28 being Rs.48.75.
- The prices recovered slightly in April to reach their previous levels at Rs.56. This brought a sigh of relief to the investors, although it was short-lived. Over the course of May and early June, the stock price of IDFC Limited slumped further. As a result, the stocks ended up shedding their gains made in April. The closing price of the scrip on June 29, 2018, was Rs.46.20.
- In late July, the company announced a final dividend of 7.5%. Around the same time, the stocks hit their 52-week low at Rs.42.90. As of August, the scrip has been recovering steadily and is back to its previous levels at Rs.50. However, it is yet to be seen how the scrip will behave in accordance with the ambiguity in the markets.
IDFC Limited Stock Trends in 2016 and 2017
- At the start of 2016, the share price of IDFC Limited was around Rs.48. Over the course of first three months, the scrip lost a little over 10% with the stock price occasionally dipping into the Rs.30 territory. The stocks ended the month of March 2016 at Rs.40.45.
- The prices rose steadily through the months of April and May, with the gains eventually surpassing the levels at which the scrip commenced the year. Towards the end of May, the IDFC Limited shares were trading hands at levels above Rs.50. In June and July, the shares found some stability at those levels as they steadily continued to move up.
- By early August, the IDFC share price was varying at levels above Rs.55 and in September, the shares soared into the Rs.60 territory. Through most of October, the investors enjoyed a steady run as the shares were traded at levels close to Rs.70. In fact, on a couple of occasions, the shares were seen changing hands at Rs.70.
- However, in the final week of October, the share price started to go down. This drop was made worse post demonetisation, following which the shares descended further into the Rs.50 region. Things didn’t change much for the remainder of the year and the closing price on December 30, 2016, was Rs.53.75.
- 2017 was a similar year for the investors. The stocks didn’t make any noticeable gains over the course of the year as the share price of IDFC Limited varied from Rs.54 - Rs.65. The scrip commenced the year at Rs.54.10. In the first quarter of the calendar year, the stocks made marginal gains.
- In early April, the stock price was close to Rs.54. For the next couple of weeks, the scrip exhibited a bullish trend and as a result, by mid-May, the shares were up by a little over 15%. However, over the course of June, the stocks moved on to drop those gains. In fact, the closing price on June 30, 2017, was Rs.55.25.
- In July, the company announced a final dividend of 2.5%. However, this didn’t do much to restore investors’ confidence as the shares were still traded at its usual levels at Rs.55 - Rs.60. In October, the prices rose once again to cross the Rs.60 mark. The gains made here were as prominent as the ones made in May earlier that year.
- However, this rally didn’t last for long as the shares ended up losing those gains gradually over the next few weeks. Things changed slightly in the final week of December when the stock price rose slightly to end the year on a positive note. The IDFC Limited shares ended the year at Rs.62.90.
Should you invest in IDFC Limited stocks?
- IDFC Limited is a non-banking finance company which primarily provides financial services in the infrastructure sector. Furthermore, the company is also involved in asset management and investment banking through its various subsidiaries. One of its well-known subsidiaries is the IDFC Bank Limited, which is also listed on the stock exchanges in India.
- For the FY2017-18, the company reported its consolidated profit after tax to be at Rs.589 crore, as against a profit of Rs.699 crore reported for the previous fiscal year. The drop in the profit came owing to a considerable increase in expenses for the year.
- To a certain extent, the overall performance of IDFC Limited depends on the performance of its subsidiaries, especially IDFC Bank. Speaking of the bank, it is relatively new in the banking sector, having commenced its operations in 2015. In its two and a half years of operations, the bank has managed to deliver decent results although, there is still a long way to go for the bank.
- Considering the performance of the stock, the scrip had a remarkable run up until 2015, following which the stocks took a sharp nosedive and lost 50% in a matter of days. The scrip has been rather stagnant since the start of 2016. The dividends haven’t been that impressive either.
- In the term lending finance sector, other players like Rural Electrification Corporation Limited and Power Finance Corporation Limited are performing considerably better. If you are looking to invest in IDFC Limited, it is feasible to invest in its banking division, that is, IDFC Bank Limited.
- Whatever may be the case, it is strongly recommended that you do your own research before investing in the stock.
IDFC Limited is a non-banking finance company which is primarily involved in the business of providing financial, advisory and management services in the infrastructure space. In addition to this, the company is also involved in investment banking, asset management, and brokerage.
History of the Company
IDFC Limited was incorporated in January 1997 as a public limited company. Its head office was based in Chennai and the company officially commenced its operations later that year in June. The main idea behind setting up IDFC Limited was to channel private capital into viable infrastructure projects, while ensuring that the risk is mitigated for the investors in the infrastructure sector. In 1998, the company was registered with the Reserve Bank of India as a non-banking finance company. Over the course of next decade, the company established various subsidiaries such as IDFC Bank Limited, IDFC Asset Management Company Limited, et cetera. The company listed its equity shares in the markets in 2005.
Management of the Company
Mr. Sunil Kakar - Managing Director, Chief Executive Officer
Mr. Sunil Kakar is the Managing Director, Chief Executive Officer, and Director of IDFC Limited. He was appointed to these positions in July 2017 prior to which, he served as the Chief Financial Officer of IDFC Bank Limited where he oversaw business planning, accounts and finance, investors relations and other key financial aspects. Prior to his association with the IDFC Group, Mr. Kakar worked with Max Life Insurance Company. Over there, he held various key positions such as Senior Director of Finance and Chief Financial Officer. In addition to this, he has worked with Bank of America for 18 years. Mr. Kakar is associated with the various entities of the IDFC Group where he serves as a member of the board. Mr. Kakar graduated from the Indian Institute of Technology, Kanpur in Engineering. He also holds an MBA in Finance which he obtained from XLRI.
Ms. Marianne T. Økkland - Independent Director
Ms. Økkland currently serves as the Managing Director of Avista Partners and is considerably experienced in the sector of international finance, specifically debt origination. From 1998 to 2008, she worked with J.P. Morgan, U.K., where she was responsible for the issues of finances and debt origination, restructuring, and capital markets. Ms. Økkland is an Independent Director of the Board at IDFC Limited and IDFC Alternatives. In addition to this, she is also a Director of IDFC FHC Limited. She holds an M.Sc degree in Finance and Economics from the Norwegian School of Economics.
Mr. Chintamani Bhagat - Member of the Board
Mr. Chintamani Bhagat presently serves as the country head of India and co-head of the global healthcare division for Khazanah Nasional. He is primarily responsible for overseeing investments across various markets and sectors like financial services, healthcare, technology, and consumer products. In addition to this, he is also an Executive Board Member at Fractal Analytics. He was also associated with the McKinsey & Co., where he last worked as a Managing Partner in the Singapore Office. Mr. Bhagat has an MBA degree from the INSEAD Business School.
IDFC Limited Stock Listings in NSE, BSE, and Stock Market Indices
The equity shares of IDFC Limited are available to the general public for trading. The shares are available for purchase on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective codes for the same are as follows:
- NSE Code: IDFCEQ
- BSE Code: 532659
- ISIN: INE034D01016
- Sector: Finance
Coming to the stock market indices, the company does not form the S&P BSE Sensex or Nifty 50. However, it does comprise other important benchmark indices such as:
- Nifty 500
- Nifty 200
- Nifty Full Midcap 100
- Nifty Midcap 100
- Nifty Midcap 50
- S&P BSE 500
- S&P BSE AllCap
- S&P BSE Finance
- S&P BSE SmallCap
- S&P BSE SmallCap Select Index
7th Floor, No. 1, Harrington Road
Chennai - 600-031
Tamil Nadu, India
Contact number: +91-44-4564-4000
Stocks vs. Mutual Funds: here's what we recommend
Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.