In this episode of Big Story, Moneycontrol's Sakshi Batra shares insight into why some private lenders have sold part of their stakes in Yes Bank
The following article is an initiative of CNBC TV-18 and is intended to create awareness among readers
IDFC Bank and non-banking financial company Capital First had announced completion of their merger on December 18.
Manpasand Beverages, Indiabulls Real Estate, Dish TV India, are some of the companies where promoters increased their holding but stocks remained underperformer.
On a combined basis, IDFC First Bank has on-book loan assets of Rs 1,02,683 crore.
The board of IDFC Bank also approved appointment of Rajiv Lall, Founder MD & CEO of IDFC Bank, as part-time non-executive chairman of IDFC First Bank, subject to approval from the RBI.
The bank's board on January 13, 2018 had approved a composite scheme of amalgamation of Capital First, Capital First Home Finance and Capital First Securities (collectively referred as amalgamating companies) with IDFC Bank (amalgamated company).
Downgrading the bank, the agency said profitability of the bank will remain weak in the medium- to near- term even after the planned merger with Capital First and added that high cost wholesale liabilities are also a concern.
The bank had posted a net profit of Rs 233.66 crore in the corresponding July-September period of 2017-18.
Industry officials and experts say they expect Indian regulators to cancel the licences of as many as 1,500 smaller non-banking finance companies because they don't have adequate capital, and to also make it more difficult for new applicants to get approval.
Standalone Net Interest Income (NII) for the quarter was Rs 489.84 crore and net profit was Rs 181.55 crore.
The profits were dragged by a substantial dip in other income and jump in provisions towards bad loans.
Apart from the RBI, the merger process has got approval from Competition Commission of India, National Housing Board, NSE, BSE and SEBI
"The Reserve Bank of India (RBI) has, via its letter dated June 4, 2018, conveyed its 'No Objection' for the voluntary amalgamation of Capital First Ltd, Capital First Home Finance Ltd and Capital First Securities Ltd with IDFC Bank," IDFC Bank said in a regulatory filing.
Trends on SGX Nifty indicate a flat opening for the broader index in India, a gain of 4.5 points or 0.04 percent. Nifty futures were trading around 10,720.50- level on the Singaporean Exchange.
Prabhudas Lilladher recommended accumulate rating on IDFC Bank with a target price of Rs 55 in its research report dated April 25, 2018.
The board of the bank had yesterday passed a resolution for borrowing or raising long term funds by issue of redeemable non-convertible debentures or other debt instruments.
Its total income was however higher during the fourth quarter of 2017-18 at Rs 2,374.35 crore as against Rs 2,279.65 crore in the year-ago period, the bank said in a regulatory filing.
Net Interest Income is expected to increase by 16.4 percent Y-o-Y (up 18.1 percent Q-o-Q) to Rs. 584.4 crore, according to Edelweiss.
Net Interest Income (NII + OI) is expected to increase by 29.8 percent Y-o-Y (down 0.1 percent Q-o-Q) to Rs. 725 crore, according to Edelweiss
"The whole process will take about six to nine months to start operating," said V Vaidyanathan, the executive chairman of Capital First here.
Ashwani Gujral of ashwanigujral.com recommends selling Wockhardt with a stop loss of Rs 935, target of Rs 890 and Repco Home with a stop loss of Rs 650, target of Rs 625.
Edelweiss is bullish on IDFC Bank has recommended buy rating on the stock with a target price of Rs 74 in its research report dated January 22, 2018.
Net interest income, the difference between interest earned and interest expended, fell 5 percent to Rs 495 crore compared to Rs 521 crore in year-ago.