Delhi News

IDBI Bank hits 52-week high, rallies 24% in 4 days on rating upgrade

Shares of rallied for the fourth straight session to hit a fresh 52-week high of Rs 48.75 on the BSE. With a rise of 8.5 per cent in the intra-day session on Thursday, the stock has gained nearly 24 per cent in the last four days following a revision in ratings by The company on September 27 informed exchanges that the rating agency has upgraded the bank’s existing ratings while keeping the outlook stable.

At 10.50 am, the stock was up 5.5 per cent at Rs 47.40 on the BSE as against a fall of 0.03 per cent in the S&P BSE Sensex.

The bank in an exchange filing said has upgraded its existing rating to A+ from ICRA A for Infrastructure bonds, Flexi Bond, Senior & Lower Tier II bonds and Subordinate debt. Further, the rating has been upgraded to ICRA A+ from ICRA A (Hyb) for Basel III Tier II Bonds and to ICRA A from ICRA BBB+ for Basel II Upper Tier II bonds.

The company added that ICRA has reaffirmed the short-term rating on the Certificate of Deposit programme at ICRA Al+ and MAA- for Fixed Deposit programme.

The rating upgrade factors in the sustained improvement in the credit profile of with expectations that the internal capital generation is likely to be sufficient for growth as well as for maintaining sufficient cushion over the regulatory capital requirements, ICRA said in its rating rationale.

“Despite the stated intention of the government and LIC to divest their ownership, the share of current and savings account (CASA) deposits and retail term deposits witnessed a steady growth leading to improved granularity in the deposit base. The bank’s ability to continuously maintain and grow the core deposit base upon the change in ownership may, however, remains a monitorable,” the rating agency added.

With an improved capital position, ICRA believes, is now better placed to pursue growth.

Having said that, ICRA expects that incremental slippages could remain high, given the reasonably large overdue book amid the weak operating environment and certain other vulnerable exposures. While the bank maintains one of the highest provision coverage ratios on its stressed assets, the timing of recoveries from these could remain uncertain.

ICRA also maintained a ‘Stable’ outlook for the bank as it believes that IDBI Bank will continue to maintain and improve upon its deposit base and will generate sufficient internal capital for meeting growth and for maintaining the desired cushion over the regulatory capital requirements.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link

For more information call us at 9891563359.
We are a group of best insurance advisors in Delhi. We are experts in LIC and have received number of awards.
If you are near Delhi or Rohini or Pitampura Contact Us Here