IDFC First Bank Shares Trade Lower Today; Here's Why

IDFC First Bank is expected to raise around Rs 2,000 crore through a qualified institutional placement (QIP) that was launched on Tuesday (October 3). The QIP price has been set at Rs 94.95 per share, nearly the same as yesterday's closing price of Rs 94.25. According to a CNBC-TV18 report, the issue will include a green shoe option of another Rs 1,000 crore. Today, IDFC Bank shares were spotted trading 1.75% lower at Rs 92.40 per share at 9:40 am IST.

In August this year, IDFC First Bank shareholders approved fundraising in the company's annual general meeting (AGM).

In an exchange filing on Tuesday, the company Bank said, "Pursuant to Regulation 176(1) of the SEBI ICDR Regulations and in accordance with the approval of the Shareholders accorded through a special resolution passed on August 31, 2023, the Bank may at its discretion offer a discount of not more than 5% on the floor price for the Issue."

Noticeably, the private sector lender had launched a QIP in 2021 as well. At that time, the issue price was set at Rs 57.35 a piece. In that QIP, the bank reserved 52.31 crore equity shares for qualified institutional buyers (QIBs) for a total consideration of Rs 3,000 crore.

The company has been able to expand its net interest margin on a continuous basis over the last 3 years with margins of 5.26% in last year.

On Tuesday, IDFC First Bank shares closed 1.55% lower at Rs 94.05.

IDFC First Bank has outperformed the Nifty 50 pack when it comes to last one-year returns. As of June 2023, promoters owned a 39.9% stake in the bank, while DIIs and FIIs owned 20.9% and 11.7%, respectively. 27.5% stake in the lender is owned by the public.

The Bank said, "Further, we would like to inform you that a meeting of the Committee of the Bank is scheduled to be held on October 06, 2023, inter alia, to consider and determine the issue price of Equity Shares to be issued pursuant to the Issue, including a discount, if any thereto as permitted under the SEBI ICDR Regulations and approved by the Shareholders pursuant to a special resolution dated August 31, 2023, for the Equity Shares to be allotted to qualified institutional buyers, pursuant to the Issue."

Last month, US-based investment firm GQG Partners bought a 2.6% stake in IDFC First Bank for 1,527 crore.