IDFC First Bank Block Deal: Stocks Fell Over 3% in Morning Trade

IDFC First Bank is engaged in the business of banking services. It was founded by the merger of erstwhile IDFC Bank and erstwhile Capital First in December 2018. The company’s shares are in the spotlight today due to a block deal.

A block deal valued at Rs 1,386 crore took place on the exchanges. Around 18.3 crore shares, representing a 2.6% stake, IDFC First Bank changed hands in the transaction.

While the identities of the buyers and sellers remain undisclosed at present, sources suggest that Cloverdell Investment, the US-based private equity firm Warburg Pincus’ arm, is seeking to divest approximately 2.25% of its stake in IDFC First Bank through a block deal. The firm was looking to sell around 15.9 crore shares worth Rs 1,191.40 crore.

The Warburg Pincus affiliate offloaded a 4.2% stake in IDFC First Bank in September for a total of Rs 2,480.34 crore. At the end of the first quarter of FY24, Cloverdell Investment held a 7.12% stake in the private lender.

Following the block deal, the shares of IDFC First Bank are trading lower and fell around 3.5% today compared to yesterday’s closing price. As of writing this article, the company’s shares are trading at Rs 75.49 per share, around 2.98% down compared to yesterday’s closing of Rs 77.81 per share on the BSE. During the morning session, it hit intraday highs and lows of Rs 76.51 and Rs 75.10 respectively. The current market capitalisation of the company stands at Rs 53,370 crore.

Today, a significant volume spurt was observed, exceeding 88.97 times the average on the BSE. Additionally, the company’s shares have delivered an impressive return of 43% in the past year and a return of around 31% in the past three years.

In terms of ownership, the Promoter holds 37.45%. The FIIs and DIIs hold 24.30% and 6.63% respectively.

Financial Performance

In the third quarter of FY24, IDFC First Bank reported an interest income of Rs 7880 crore, reflecting a growth of 33% YoY compared to the same quarter in the previous year, when the interest income stood at Rs 5912 crore. Furthermore, the company reported a net profit of Rs 732 crore, compared to a net profit of Rs 617 crore in the same period last year. However, the company’s net profit has surged by around 18.60% YoY this quarter.

The company’s ROCE and ROE are 6.60% and 10.60% while the shares are trading at a PE of 17.7 times in the market.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.