During the trading session on Thursday, shares of IDFC soared as much as 19% after the Reserve Bank of India (RBI) permitted it to depart as the promoter of IDFC First Bank. IDFC Limited said on July 21 that the five-year lock-in term for its role as a promoter of IDFC First Bank has come to an end.
"We would like to inform you that the Reserve Bank of India ("RBI") has, vide its letter No. DOR..HOL.No.SUO‐75590/16.01.146/2021‐22 dated July 20, 2021, clarified that after the expiry of lock‐in period of 5 years, IDFC Limited can exit as the promoter of IDFC FIRST Bank Limited," said the company in a press release.
IDFC owns 36.56 percent of the bank, which began operations in October 2015 and celebrated its fifth-anniversary last year.
IDFC's stock increased by 19% to Rs 62.60. At 12.30., the counter was trading at Rs 59.45, higher 12.59% on NSE. It touched an intra-day high and 52-week high of Rs 62.90 and a low of Rs 58.35 during the trade.
According to RBI regulations, the non-operative financial holding company, which is the bank's promoter, must own at least 40% of the bank's paid-up voting equity capital, which will be locked in for five years from the date of the bank's first day of business.
In 2014, IDFC Bank and Bandhan Bank were granted licenses. IDFC Bank Ltd and Capital First Ltd announced in 2018 that they had merged to form IDFC First Bank.