IDBI Bank becomes fifth most valuable private bank, shares surge by 100%

Private sector lender IDBI Bank Ltd has now become fifth most valued private lender replacing Bandhan Bank, Yes Bank and Indusind Bank after its shares grow over 100 percent in the last three weeks. It stands sixth in the overall Indian listed banking sector in terms of value.

IDBI Bank

Since 18 May, shares of IDBI Bank surged nearly 102 percent. So far this year it gained around 0.81 percent. The stock of the bank started surging after the lender announced a profit for March quarter after 13 consecutive quarter losses. On Monday, the scrip closed at Rs 37.30 on BSE, down 2.9 percent from its previous close with market cap of Rs 38,719 crore.

While HDFC Bank Ltd remains India’s most valued bank with market value of Rs 5.68 trillion followed by Kotak Mahindra Bank ( Rs 2.65 trillion), ICICI Bank Ltd ( Rs 2.31 trln), State Bank of India ( Rs 1.68 trln) and Axis Bank Ltd ( Rs 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 was reported at 27.53 percent as against 27.47 percent as on March 31 last year and 28.72 percent as on December 31.

Recent bend in banking stocks was due to expectation of slowdown in economic activity post the outbreak of covid-19 that analysts expect to hamper the 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 declined by 70 percent, Bandhan Bank 50 percent, Yes Bank 34 percent, ICICI Bank 33 percent, Kotak Mahindra Bank and HDFC Bank Ltd slumped 20 percent each.

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