IDBI Bank, or the Industrial Development Bank of India, is a public sector bank established by the Indian government in 1964 to deliver financial services specifically to the industrial sector. Over time, it evolved into a comprehensive commercial bank.
On December 31, 2024, the board of directors at IDBI Bank Ltd. sanctioned the raising of ₹10,000 crore through long-term bonds aimed at financing infrastructure projects and affordable housing.
These bonds will be issued in the domestic market in phases, with up to ₹5,000 crore expected to be raised by March 31, 2025, and the remaining amount during the 2025-26 financial year, as stated in a filing to the stock exchange. However, the bank has not provided details regarding the specific maturity, coupon rate, or other related aspects of the bond issue.
This decision follows a trend among banks to secure funds via infrastructure bonds due to a slowdown in deposit growth. Financial institutions typically utilise infrastructure bonds to gather capital for financing long-term projects.
These bonds generally have a minimum maturity period of seven years and may qualify for certain regulatory exemptions, including those concerning the statutory liquidity ratio and cash reserve ratio. Furthermore, loans for affordable housing can also be applied to support the financing of these infrastructure bonds.
IDBI Bank Ltd. has announced a 39% year-on-year rise in net profit, reaching ₹1,836 crore in the second quarter of FY25. This growth was bolstered by a 26% increase in net interest income, which amounted to ₹3,067 crore. The bank’s net advances rose by 19% to ₹2.01 lakh crore, while total deposits grew by 11% to ₹2.78 lakh crore, with a CASA ratio of 48.14%.
In terms of asset quality, gross non-performing assets (NPA) fell to 3.68%, and net NPA decreased to 0.20%. The net interest margin improved to 4.87%, and the provision coverage ratio increased to 99.42%, highlighting the bank’s strong financial performance and operational efficiency.
At 11:24 AM, IDBI Bank Ltd.’s share price on the NSE was ₹77.09 per share, reflecting an increase of more than 1%.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
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