IDBI Bank Ltd is now the fifth most valued private lender replacing Bandhan Bank, Yes Bank and Indusind Bank after its shares surged over 100% in the last three weeks. In overall Indian listed banking sector, it is ranked sixth valued bank.
Shares of IDBI Bank surged nearly 102% since 18 May. So far this year it gained 0.81%. The stock started surging after the lender announced a profit for March quarter after 13 consecutive quarter losses. On Monday, the scrip closed at ₹37.30 on BSE, down 2.9% from its previous close with market cap of ₹38,719 crore.
HDFC Bank Ltd remains India's most valued bank with market value of ₹5.68 trillion followed by Kotak Mahindra Bank ( ₹2.65 trillion), ICICI Bank Ltd ( ₹2.31 trln), State Bank of India ( ₹1.68 trln) and Axis Bank Ltd ( ₹1.14 trln).
IDBI Bank on 30 May reported a net profit of Rs135 crore in the quarter ended March as against a loss of Rs4,918 crore for Q4FY19. However, for FY20, it’s net loss stood at ₹12,887 crore against a loss of ₹15,116 crore in FY19.
The gross non-performing asset (NPA) ratio stood at 27.53% as against 27.47% as on March 31 last year and 28.72% as on December 31.
Recent slump in banking stocks was due to expectation of slowdown in economic activity post covid-19 that analysts expect to derail credit growth and impact the credit worthiness of the borrowers specifically higher for unsecured and small operations.
Since start of this year, Indusind Bank has fallen 70%, Bandhan Bank 50%, Yes Bank 34%, ICICI Bank 33%, Kotak Mahindra Bank and HDFC Bank Ltd slumped 20% each.
Recently, Moody’s Investor Service downgraded eleven Indian banks, citing economic disruption caused by covid-19 outbreak, asset price declines creating severe credit shock across sectors and weakening borrowers' credit profiles.
In August 2018, the government approved acquisition of controlling stake in the bank by state-run insurer Life Insurance Corporation of India (LIC) as promoter. The Reserve Bank reclassified IDBI Bank as a private sector lender for regulatory purposes in January, after LIC acquired a 51% stake in the bank by infusing around ₹20,800 crore. The government now holds a 46.46% stake in the bank.