LIC has raised stake in private sector lender IDFC First Bank by adding 0.2 percent stake through private placement at a price of Rs 80.63 per share, India's largest insurer informed in an exchange filing on July 4.
The share purchase is for investment purpose, LIC said, and takes its stake in IDFC First Bank to 2.68 percent. For the year so far, shares of IDFC First Bank are down 7.6 percent, and marginally higher by 3 percent over the last one year.
On May 30, IDFC First Bank had approved issuance of shares worth Rs 3,200 crore on a preferential basis at a price of Rs 80.63 per equity share, amounting to Rs 3,200 crore. LIC, HDFC Life, AB Sun Life, Bajaj Allianz, ICICI Lombard & SBI General were announced as the allottees of the share placement.
The managing director and chief executive officer V Vaidyanathan had told Moneycontrol in April that the bank has a borrowing plan of Rs 5,000 crore for the second half of this financial year.
"Things are looking good for the next year, profitability will be more pronounced in the last two quarters of FY25. Our cost to income will come down into the 60s and the ROA (return on assets) will go past 1.3 in our estimates.", Vaidyanathan told Moneycontrol in April.
IDFC First is engaged in banking services and has a market capitalisation of over Rs 57,000 crore.
The Q4FY24 showed Net Interest Income (NII) grew 24 per cent to Rs 4,469 crore in Q4FY24. The bank’s gross Non-Performing Assets (NPAs) reduced to 1.88 per cent of gross advances as of March 31, 2024, from 2.51 per cent by the end of March 2023. It reported a 10 per cent decline in net profit at Rs 724 crore for the fourth quarter ended March 2024 due to a substantial jump in provisions.
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