Business
Crypto
Markets
INDIA
Stocks
IDFC First Bank has clinched a spot in India’s top 10 most valuable listed banks, overtaking Union Bank of India and Canara Bank. With a market valuation of Rs 65,325 crore as of September 4, IDFC First Bank pushed Union Bank of India (Rs 65,251 crore) and Canara Bank (Rs 61,081.77 crore) down the list, according to BSE data. At the pinnacle is HDFC Bank, the most profitable Indian bank, with a market cap of Rs 12 lakh crore, followed by ICICI Bank at Rs 6.77 lakh crore and State Bank of India at Rs 5.14 lakh crore. Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Bank of Baroda, IDBI Bank, and Punjab National Bank complete the top 10.
IDFC First Bank’s shares have seen a remarkable rally, reaching a record high of Rs 98.99 each on September 4. This surge, marking a 67 percent increase so far this year, surpasses all other listed banks, private and state-run alike. The bank’s positive performance is attributed to its upcoming merger with IDFC and inclusion in the MSCI Global Standard Index on September 1, potentially attracting $170-180 million in investments.
On September 4, the stock surged over 5 percent following Rajiv Jain of GQG’s purchase of 17.1 crore shares, equivalent to a 2.58 percent stake in the bank, for about Rs 1,527 crore. While many investors are optimistic, analysts are closely monitoring the bank’s performance. Despite impressive metrics, there are questions about the sustainability of its momentum. CEO Vaidyanathan, who has emphasized growth in the past, seems to be shifting towards a more balanced approach between growth and profitability, analysts noted.
IDFC First Bank boasts a robust net interest margin (NIM) and demonstrates strong growth potential. Despite market challenges, the bank has maintained a healthy asset quality performance, although its Return on Assets (RoA) and Return on Equity (RoE) have been impacted by a higher cost-to-income ratio.
For the June quarter, the bank reported nearly a 36 percent year-on-year increase in net interest income, accompanied by a 49 percent spike in other income. Net profit also advanced by over 61 percent, while provisions surged by 55 percent compared to the previous year. Operating expenses were up by 37 percent.
