The bank has received binding bids for stake sale in its mutual funds subsidiary while the process is on for monetising investment in IDBI Federal Life Insurance.
IDBI Bank is in talks with investors, including Life Insurance Corporation of India (LIC) to raise Rs 10,000 crore capital by the end of second quarter to meet minimum regulatory requirements, the bank's MD & CEO Rakesh Sharma said after announcing April-June results on August 14.
This includes Rs 1,500 crore to be realised by sale of non-core assets, Sharma added. The bank has received binding bids for stake sale in its mutual funds subsidiary, while the process is on for monetising investment in IDBI Federal Life Insurance.
The bank's capital adequacy ratio fell to 8.31 percent in the June-ended quarter, from 11.73 percent in the previous quarter. Its Common Equity Tier-1 ratio fell to 5.9 percent, from 8.91 percent in the previous quarter.
Currently, LIC holds 51 percent stake, while the government owns 46 percent in the bank.
IDBI Bank posted net loss of Rs 3801 crore in the April-June quarter, as compared to net loss of Rs 2409 in the same period last year.
Its gross non-performing assets (NPA) ratio was at 29.12 percent in the first quarter, from 27.47 percent in the previous quarter and 30.78 percent in the first quarter last year. The net NPA ratio eased to 8.02 percent from 18.76 percent in the same period last year.
The bank saw Rs 3486 crore of slippages in the June-ended quarter, including Rs 2226 crore from two accounts in the power sector on directions from the Reserve Bank of India (RBI). Sharma said that the bank expects to contain slippages within Rs 1500 crore and bring net NPA ratio down to 6 percent in the coming quarters.
He said that the bank expects to exit the RBI's Prompt Corrective Action framework and turn profitable by end of current financial year on the back of lower provisions, fresh capital and higher recoveries.
The bank's recoveries and upgradations were lower at Rs 867 crore in the April-June quarter, from Rs 1089 crore in the previous quarter.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Aug 14, 2019 07:16 pm