IDFC First Bank Raises Rs 1500 in Tier II Bonds
IDFC First Bank has informed the exchange about raising Rs 1500 crore in tier-II bonds for 10 years tenure with coupon interest rate of 8.4 percent. The bonds witnessed strong interest from corporate clients, insurance companies, pension funds and provident fund as per exchange data. After the issue, IDFC First Bank has capital adequacy ratio of 17.6 percent.
The bonds with face value of Rs 1 crore each were raised through private placement on the NSE e-bidding platform. Crisil Ratings has upgraded IDFC First Bank bonds to CRISIL AA+ rating.
IDFC First Bank has managed to control its non-performing assets during the recent years. As on 31 March, 2023, the retail clients gross NPA stood at 1.65 percent and net NPA was recorded at 0.55 percent. The asset quality of the bank has improved and this has led to rerating of the stock. For the year ending March 2023, IDFC First Bank reported profit after tax of Rs 2440 crore.
Both Public Sector and Private Sector Banks in India could see a rerating as majority of banks have cleaned up their loans books. Banks have been facing serious NPA issues for years and they have finally managed to reduce NPAs to reasonable levels. NPA has been a big issue for all banks and investors keep a close watch on NPA numbers reported by banks. Public sector banks including SBI, PNB, Canara Bank, Bank of Baroda have witnessed rally after these banks reported improvement in their asset quality.
IDFC Bank stock has offered good returns to investors from 52-week low of Rs 30.6 to yearly high of Rs 84.50. In recently issued ratings update, CLSA has downgraded IDFC First Bank from ‘BUY’ to ‘Underperform’. The target price for IDFC First Bank has been raised from Rs 80 to Rs 85 by CLSA.
IDFC First Bank stock has been hovering around 52-week high of Rs 84.5. The stock closed at Rs 78 after touching an intraday high of Rs 79.60.