LIC Increases Stake by Purchasing 18,60,34,900 Shares of This Private Sector Bank; Do You Own It?

LIC has boosted its stake in this private bank from 1.42 crore shares to 20.02 crore shares. The bank's shares are available at under Rs 100 each.

Life Insurance Corporation (LIC), the largest insurance provider in India, has increased its shareholding in equity shares of IDFC First Bank Limited from 1,42,01,484 to 20,02,36,384 shares on a preferential basis. This represents an increase from 0.20 per cent of the pre-issue paid-up capital to 2.68 per cent of the post-issue paid-up capital of the company. The acquisition was done through a private placement offer, with the cost of acquisition amounting to Rs 80.63 crore as per the private placement offer dated June 30, issued by IDFC First Bank.

IDFC First Bank is engaged in the business of banking services and was formed by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018.

In the first nine months of the financial year 2023-24, IDFC First Bank reported several key financial ratios. The Capital Adequacy Ratio stood at 16.73 per cent, indicating the bank's strong capital position relative to its risk-weighted assets. The Net Interest Margin, a measure of profitability, was reported at 6.36 per cent, reflecting the bank's efficiency in generating interest income from its assets. The Gross Non-Performing Assets (NPA), a measure of loans that are in default, was recorded at 2.04 per cent, while the Net NPA stood lower at 0.68 per cent, indicating effective management of bad loans.

Furthermore, the Current and Savings Account (CASA) Ratio, a gauge of low-cost deposits, was 46.8 per cent, highlighting the bank's reliance on stable and inexpensive funding sources. Finally, the Book Value per share was reported at Rs 44.51, indicating the theoretical value of each share based on the bank's net assets. These ratios provide insights into IDFC First Bank's financial health and operational efficiency during the period. Moreover, the bank operates a network comprising 897 branches and 1,136 ATMs across India.

As per Quarterly Results, the bank has reported a net profit of Rs 732 crore compared to Rs 816 crore same quarter last year. In FY24 it reported a net profit of Rs 2942 crore compared to Rs 2485 crore.

Currently, IDFC First Bank shares are trading at around Rs 81.60 per share on the BSE.

Investors must keep this stock on their radar.