The bullish trading in the IDFC Bank stock stems from the impending merger with IDFC and its entry into the MSCI Global Standard Index
Most-Valued Banks In India: IDFC First Bank entered into an elite club of the 10 most-valuable listed banks in India with a market cap of Rs 66,386.78 crore, surpassing state-run lenders Union Bank of India and Canara Bank.
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While breaching Rs 100 mark and climbing to a new peak, IDFC First Bank shares ascended from Rs 31 to Rs 100.70 apiece levels in near 15 months, delivering around 225 per cent return to its shareholders in stock market rebound after Russia-Ukraine crisis.
Union Bank of India has a market capitalisation (MCap) of Rs 65,251 crore, while Canara Bank is worth Rs 61,081.77 crore, according to BSE data. HDFC Bank leads the league as India’s most profitable bank with a market cap of Rs 12 lakh crore, followed by ICICI Bank at Rs 6.77 lakh crore, and state-run State Bank of India at Rs 5.14 lakh crore. Kotak Mahindra Bank comes at the fourth spot, followed by Axis Bank, IndusInd Bank, Bank of Baroda, IDBI Bank and Punjab National Bank.
The shares of IDFC First Bank scaled a record high of Rs 98.99 each, keeping up the rally for the fourth straight trading session on September 4. With a 67 per cent surge so far this year, it leads all listed banks, both private and state-run. The bullish trading in the IDFC Bank stock stems from the impending merger with IDFC and its entry into the MSCI Global Standard Index on September 1, potentially bringing in $170-180 million in investments, analysts said.
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The stock on September 4 jumped over 5 per cent after Rajiv Jain of GQG bought 17.1 crore shares or 2.58 per cent stake in the lender for about Rs 1,527 crore.
While many investors are enthusiastic, some analysts are closely monitoring the bank’s performance. Despite a strong show on various metrics, there’s curiosity about the sustainability of the momentum. CEO Vaidyanathan, who has previously stressed on growth, appears to be shifting towards a more balanced approach between growth and profitability, analysts said.
IDFC First Bank boasts of a robust net interest margin (NIM) and exhibits a strong growth profile. Despite facing challenges in the market, the bank has maintained a healthy performance in terms of asset quality, though its Return on Assets (RoA) and Return on Equity (RoE) have been hit by an elevated cost-to-income ratio.
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IDFC First Bank share price target
However, Sumeet Bagadia, Executive Director at Choice Broking believes that IDFC First Bank shares may continue its uptrend in near term. Bagadia said that those who have IDFC First Bank shares in portfolio should continue to hold the scrip for near term target of Rs 110 to Rs 115 apiece levels. However, he advised strict stop loss at Rs 91 levels.
IDFC First Bank share price history
In last one month, IDFC First Bank’s share price has delivered over a 12 per cent return to its shareholders. In last six months, IDFC First Bank share price has ascended from around Rs 57 to Rs 100.70 apiece levels on NSE, logging more than 70 per cent rise in this time. In YTD time, IDFC First Bank shares have appreciated from around Rs 61 to Rs 100.70 per share levels, clocking to the tune of 60 per cent rise in this time. In last one year, this banking stock has surged from near Rs 50 to Rs 100.70 per share levels, delivering multibagger return to its shareholders. Likewise, in post-Covid rebound, this banking stock has surged from around Rs 19 to Rs 100.70 apiece levels, delivering around 430 per cent return to its positional shareholders.
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