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LIC Increases Stake in IDFC First Bank to 2.68% with ₹1,500 Cr Acquisition

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Synopsis:

LIC acquires 20 crore shares of IDFC First Bank at ₹80.63 each, totalling ₹1,500 crores. This move raises LIC's shareholding by 0.20% to 2.68%. LIC's strategic investment in IDFC First Bank underscores its confidence amidst the bank's financial challenges.

LIC Increases Stake in IDFC First Bank

State-owned insurer Life Insurance Corporation of India (LIC) has increased its stake in IDFC First Bank, acquiring 20 crore shares at a price of ₹80.63 per share. This move raises LIC's shareholding by 0.20% to 2.68% of the bank's post-issue paid-up capital, marking a strategic investment worth ₹1,500 crore.

LIC's acquisition, announced after market hours, positions it as a substantial shareholder in IDFC First Bank.

Financial Performance

IDFC First Bank has faced challenges in the market, showing minimal returns over the past year and an 8% decline in its share price this year, currently down 24% from its recent high. For the quarter ending March 31, 2024, IDFC First Bank reported a net profit of ₹724.35 crore, down from ₹802.62 crore in the same period last year.

Explore: Idfc First Bank Limited Share Price

Despite this, the bank's interest income grew by 28% year-on-year to ₹8,219.21 crore, while interest expenses rose by 32.63% to ₹3,750.34 crore. The bank's total deposits surged by 38.7% year-on-year to ₹2,00,576 crore, with customer deposits increasing by 41.6% to ₹1,93,753 crore.

Notably, CASA (Current Account Savings Account) deposits rose by 31.7%, contributing to a CASA ratio of 47.2% as of March 31, 2024.

In Conclusion

LIC's strategic investment in IDFC First Bank underscores its confidence amidst the bank's financial challenges, aiming to leverage the bank's growing deposit base and improved interest income to enhance shareholder value and stability in the banking sector.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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