IDFC First Bank Stock Fundamental Analysis 2023: Should You Invest?

Before I start my article “IDFC First Bank Stock Fundamental Analysis 2023: Should You Invest?” It is essential for you to have an idea about the background of the company that is IDFC first bank.

Let’s dive in!

IDFC First Bank is one of the fastest-growing commercial banks in India. With solid fundamentals and a dedicated industry expert team, IDFC’s first bank bets well for investing your money to earn good returns in a short and long period. I have also invested in this bank and am increasing my monthly stake per my risk appetite.

I closely follow IDFC’s first bank for a year now and hence am writing this analysis to help you decide to invest in IDFC’s first bank. Below is the screenshot of my upstox account as proof of my investment.

“We have built a strong foundation for the bank with a diversified customer deposits and diversified loan book. We have registered our highest ever quarterly profit,”

-V Vaidyanathan, managing director and CEO, IDFC FIRST Bank.

Before starting the Fundamental analysis, which will help you to decide whether you should invest in IDFC first bank, let me provide a brief history of IDFC First Bank. Here it goes.

IDFC First Bank Stock Fundamental Analysis 2023: Background Of IDFC First Bank

 IDFC First Bank is a private sector bank in India that was formed as a result of a merger between IDFC Bank and Capital First in December 2018. The merger was aimed at creating a strong retail-focused bank with a diversified portfolio of products and services.

IDFC Bank was originally incorporated in 2014 as a specialized infrastructure financing institution, with a focus on providing long-term funding to infrastructure projects. However, in 2015, the bank received a universal banking license from the Reserve Bank of India, which allowed it to expand its operations and offer a wider range of financial products and services to its customers.

Capital First, on the other hand, was a non-banking financial company that was founded in 2002. The company specialized in providing loans to small and medium enterprises, as well as consumer finance.

The merger between IDFC Bank and Capital First was structured as an all-stock deal, with IDFC Bank acquiring Capital First through a share swap. The merged entity was rebranded as IDFC First Bank, with a focus on retail banking, small and medium enterprise lending, and wholesale banking.

IDFC First Bank Stock Fundamental Analysis 2023: How Banks Make Money

Before I start the review of the IDFC first bank stock, I think I should provide a brief idea about how a bank works and makes money. It is very important to understand the business you are investing in as warren buffet once said” You should not invest in a business you don’t understand “.

Moreover, your investments will grow only when the business grows in terms of size, the number of branches, and its return on capital employed. So let’s understand how a bank works as briefly as possible.

A bank is a financial institution that takes money from the public as deposits and lends it to others as loans. The interest charged by the bank on loans is more than the interest it pays to the depositors as interest. The difference in interest is what a bank earns.

For example,

Suppose you deposited Rs 100 in a bank savings account and the bank pays 3% interest on savings deposits per annum and the lending rate of the bank is 10%.

Then,  

You will get 100×3/100 = Rs 3 as your first-year interest and if the bank lends the money to a businessman @10%, 

The bank will earn,

                                     100×10/100 = Rs 10.

Hence, the net earning of the bank will be,

Rs 10-Rs 3 = Rs 7.

As you might have understood, to be successful a bank must have sufficient and growing deposits and a healthy loan profile or regular interest earnings with very little percent of the bad loan or NPA(non-performing assets).

Now lets, Analyse the IDFC first bank and see whether it is worthy of investment or not. And we will do this through a fundamental analysis of the IDFC first bank.

Fundamental analysis of IDFC’s First Bank

Fundamental analysis of a company gives us important information regarding the business which helps us to know its past financial performances, present financial health, and future growth potential. So let’s understand important components of fundamental analysis that will help us to make a well-researched investment in the IDFC first bank.

IDFC First Bank Stock Fundamental Analysis: Retail and Wholesale Deposits Growth of IDFC First Bank 

Deposits are the primary source of funds for a bank without which it cannot operate. The bank uses the money it receives from deposits to lend to borrowers.

A bank usually receives two types of deposits,

First, is retail deposits: Such deposits are small savings and fix deposits deposited in the bank by people like us.

Second is wholesale deposits: This type of deposit is made by large institutions like SBI or some big businesses. This involves a huge amount of money.

You can infer from the above chart that in one year the bank’s total deposits have increased from Rs 82725 crores to Rs 93214 crores which is an increase of approximately 12.67%. 

And from March 2022 quarter to December 2022 quarter the increase becomes 32.25% in less than one year.

What does the above say?

With the above increase in the deposits, one can say that the confidence of the public as well as big institutions has increased in the bank and we do have a good chance of getting respectable returns on our investments if other parameters stand the test.

As you can also observe from the above chart, IDFC’s first bank has strong deposit growth. The last 4 year’s CAGR growth of IDFC first bank is 34%

Which deposits are better for growing bank retail or wholesale?

Retail deposits are deposits made by individuals, families, or small businesses. These deposits tend to be smaller in size compared to wholesale deposits, but they are more stable and come with lower funding costs.

On the other hand, 

Wholesale deposits are deposits made by larger institutional investors, such as corporations, pension funds, or other financial institutions. These deposits tend to be larger in size but come with higher funding costs and may be more volatile than retail deposits. 

As far as my experience goes, a bank that relies heavily on wholesale deposits by big institutional investors is more prone to fail than happens with the Silicon Valley bank. 

Because, unlike the retail depositors, the big wholesale depositors enter the bank with full legal force to get their money if they smell anything wrong with the bank.

As far as IDFC’s first bank is concerned, it is a growing bank hungry to acquire a robust customer base for which it must increase the share of retail deposits over wholesale deposits.

CASA deposits growth of IDFC First Bank

CASA stands for Current Account Savings Account. It’s a type of bank deposit account that combines both current and savings accounts. These accounts are different from other types of bank accounts because they don’t earn much interest. Instead, they allow customers to easily access their money whenever they need it.

How CASA deposits influence investors’ Decisions

A higher and growing CASA shows increasing public trust in the bank. And higher public trust means more public deposits and hence more funds at the disposal of the bank.

Two ways CASA deposits influence investors’ minds.

Firstly, having a higher proportion of CASA deposits in a bank’s portfolio can be seen as a positive sign by investors. This is because CASA deposits tend to be more stable than other types of deposits, like term deposits. Since CASA deposits are a combination of current and savings accounts, they tend to be less likely to be withdrawn suddenly compared to other types of deposits. This makes them a reliable source of funding for banks and helps to improve their liquidity position.

Secondly, higher CASA deposits can also lead to lower funding costs for banks. Since current accounts don’t earn any interest and savings accounts typically earn lower interest rates, banks can use these deposits to fund their lending activities at a lower cost than other types of deposits. This can help to improve the bank’s profitability and make it more attractive to investors.

Overall, investors tend to view higher CASA deposits as a positive sign for banks. It signals stability, lower funding costs, and potentially higher profitability.

As you can see from the above chart there has been a continuous increase in the CASA deposits of the IDFC first bank, which is a good sign that the bank will grow its business and hence its investor’s money in the long run.

IDFC First Bank Stock Fundamental Analysis: Revenue Of IDFC First Bank

Amounts in crores.

Post-merger, the revenue of the IDFC first bank is growing with a slight decrease in 2021(may be due to covid-19). The bank deploys its funds in different areas in a balanced and well-thought-out strategy so as to make the risk as minimum as possible. As you can infer from the above chart, Idfc first Bank has increased its revenue by around 188.87% since its inception and that’s a great achievement for a new bank.

But, 

I must tell you that, IDFC First Bank was not born out of inexperience, which I have talked about at the start of this article. It was a merger of two well-doing financial institutions. 

Hence, 

You must not get swayed by its performance. We have to wait for some more time to decide on the robustness of the bank and its ability to become a multi-bagger. So you should invest a lot of your hard-earned money. Hold your emotions and make a balanced investment portfolio.

IDFC First Bank Stock Fundamental Analysis 2023: Funding or deployments of funds to earn revenue

Funded assets are one of the main sources of earnings for a bank. Let’s first understand what funded assets are.

Funded assets of a bank are loans and investments that a bank makes using the money it has received from depositors and other funding sources.

When we talk about the funded assets of IDFC First Bank, we are referring to the loans and investments that the bank has made using the funds it has received from its depositors and other funding sources.

 These assets are called “funded” because they are supported by the funds that the bank has received from its customers and other sources.

 The bank earns interest income from these funded assets, which helps to generate revenue and profits.

Examples of funded assets are

a variety of loans, such as personal loans, business loans, and mortgages, as well as investments in debt securities such as government bonds and corporate bonds.

As per the bank’s annual report for the financial year 2022-23, the total funded assets of IDFC First Bank were INR 1,52,152 crore.

The bank’s loan portfolio is diversified across various sectors, including agriculture, construction, manufacturing, and services. It can be easily grasped from the above pie chart that the funded assets of IDFC First Bank are well-diversified and managed prudently to ensure the safety and soundness of the bank.

Now,

Let’s get a brief idea about the funded assets of IDFC’s first bank.

IDFC First Bank Stock Fundamental Analysis: Funded Assets and associated risks of IDFC First Bank

Funded assets	Percentage(%)	Risks involved
1. Infrastructure Loans  Infrastructure loans are loans provided by financial institutions to fund the construction or maintenance of infrastructure projects such as roads, bridges, airports, and other public utilities.	20	Political risk: due to government involvement. Construction risk: delays, cost overruns, and construction defects Economic risk: changes in interest rates, inflation, or currency fluctuations
2. Home loan	12	Credit risk: borrowers may default on their home loan repayments Interest rate risk: Higher interest rates can make borrower default and lower interest rates can decrease a bank’s profit. Market risk: decline in property values could result in loss to a bank as the collateral may not cover the outstanding loan value
3. Loan against property	13	Price volatility risk: gold prices change a lot. If it goes below the outstanding loan then it may turn into a loss for a bank Cybersecurity risks: like hacking and data breaches. Regulatory risk: noncompliance with government regulation may result in a penalty for the bank.
4. Vehicle loans	9	The potential risks are covered above.
5. Consumer loans	13	Covered above
6. Rural finance	11	Rural finance has its own set of challenges due to a lot of politics involved.
7. Digital gold loan and others	8	Credit cards are unsecured loans, therefore they have a high chance of default. Fraud risk: like identity theft, skimming, and phishing, which may damage a bank’s reputation Operational Risk: Credit card operations involve various processes such as underwriting, card issuance, billing, and customer service. If any of these fails then it may result in losses.
8. Credit cards	2	Price volatility risk: gold prices change a lot. If it goes below the outstanding loan then it may turn into a loss for a bank Cybersecurity risks: like hacking and data breaches. Regulatory risk: noncompliance with government regulation may result in a penalty for the bank.
9. Commercial finance: It is the art and science of managing monetary resources for enterprises and institutions. It encompasses a wide range of financial undertakings, including sourcing and administering capital, making investments, and assessing financial hazards and prospects.	9	Credit risk: arising from the possibility of borrowers defaulting on their loan payments. Market risk: occurs due to fluctuations in the financial markets, such as changes in interest rates, currency exchange rates, and commodity prices. Operational risk: arises from failures in internal processes, human error, or technology breakdowns that impact the bank’s ability to provide services to its customers.
10. Corporate and others Corporate loans are financial instruments that are extended by banks or other financial institutions to corporations, partnerships, or other business entities for capital investments, expansion plans, working capital,etc	Credit cards are unsecured loans, therefore they have a high chance of default. Fraud risk: like identity theft, skimming, and phishing, which may damage a bank’s reputation Operational Risk: Credit card operations involve various processes such as underwriting, card issuance, billing, and customer service. If any of these fails then it may result in losses.	Political risks: India’s economy is a political economy, hence chances of politicians meddling with the bank finances are high. This may play with the bank’s autonomy in lending. Other risks: many of the risks explained above in the table are also part of corporate and other loans.

IDFC First Bank Stock Fundamental Analysis: 2023 Net Interest Margin 

A bank earns interest on its assets(loans etc) and it pays interest on its liabilities(customer deposits).

Net Interest Margin (NIM) is a key measure of a bank’s profitability that represents the difference between interest income and interest expense.

To be precise,

The Net interest margin (NIM) is the difference between what a bank earns from lending money to customers and what it pays to borrow money from depositors or other sources. The NIM is expressed as a percentage and is calculated by dividing the net interest income by the average earning assets over a specific period.

For example,

If a bank’s average interest-earning assets are Rs 1000, which may include loans and advances and others like credit cards and it earned an interest income of Rs 60 and its interest expense is Rs 30. Its Net interest margin (NIM) would be 

60-30/1000 X100  = 3%.

A high NIM indicates that the bank is earning a greater return on its assets relative to the cost of its liabilities, this shows that the bank is on higher profitability growth.

A low NIM indicates that the bank is getting trouble generating enough income from its assets to cover its liabilities – a cause of concern.

Below is the chart showing the year-by-year growth of NIM for IDFC first bank.

As you can see IDFC’s first bank has been consistently increasing its  NIM year after year. And if it continues to do so for a few more years then this stock may prove a multi-bagger stock in the future, thereby multiplying your investments in the long term. 

The NIM is of course growing. But the question is ‘Is the IDFC’s first bank profitable? 

IDFC First Bank Stock Fundamental Analysis 2023: Net profit of IDFC first bank from 2018 to 2022

Observes the following chart below

Update: IDFC First Bank on April 29 2023 reported a massive 134 percent jump in standalone net profit at Rs 803 crore for the March quarter (Q4 FY23), from Rs 343 crore in the year-ago period.Net profit jumped 32.7 percent on a quarterly basis.

If you have observed you have found out that the profit of IDFC first bank is not growing much as expected considering its NIM and there is a huge loss in 2020 due to it providing a huge provision against covid-19 wave 2.0. 

If IDFC first bank is not earning much profit then it may not give dividends to its shareholder. This will drag the growth of share price and hence the value of the stock will not move much in the short term.

Also, From the chart above it can be inferred that it seems that the Management of IDFC first bank is not much inclined towards earning profit by venturing into very high-risk ventures or projects. 

And to know the exact reasons for the same I analyzed the bank’s annual reports and found this statement by one of its management personnel

This shows that the management of IDFC’s first bank wants to first establish itself as a robust bank with strong financials and gain much of the retail banking markets. Once it is done it goes on to earn profits.

As per IDFC first bank’s annual report 2021-22, it will focus on profitably in FY 2023.

Moving further let’s discuss the asset quality of IDFC first bank

IDFC First Bank Stock Fundamental Analysis 2023: Asset Quality

Since you have read so far you must have had an idea about how banks make money. Banks are in the lending business mostly and they earn by way of charging interest on loans and advances given. The loans and advances and other investments are the bank’s assets.

And there are inherent risks associated with every asset on which banks earn money.

Asset quality refers to the level of risk associated with a bank’s assets, specifically the loans and investments it has made. The quality of a bank’s assets is an important measure of its financial health and stability.

To minimize the risk banks make a portfolio of assets called an asset portfolio.IDFC first bank has a highly diversified asset portfolio as I have mentioned above in the article.

Factors that can affect asset quality include the creditworthiness of borrowers, the diversification of the bank’s loan portfolio, and the economic conditions in which the bank operates.

To analyze the asset quality analyst categorize the bank’s assets into two categories:

Performing assets:

Performing assets refer to loans or investments held by a bank or financial institution that are generating income for the institution because the borrowers are making timely payments on their loans or the investments are generating returns as expected.

For example,

If a bank has given a loan of Rs 10 lakh @ 12% per annum. Then per month interest would be Rs 1,20,000. And if the bank is getting this much interest every year then the investment or the assets of Rs 10 lakh for the bank will be considered as performing assets.

Non-performing assets or NPA:

This is the second category of assets and is scary for the bank.

Any asset (loan or advance), including a leased asset, becomes non-performing when it ceases to generate income for the Bank.

Suppose in the above example the person or institution taking the loan of 10 Lakhs defaults on interest payment or the bank is not getting any return on investments or assets then that asset will be considered as non-performing assets or NPA.

What is the normal range of NPA?

There is no officially declared limit on NPA but an NPA within 3% is manageable by the bank.

Year	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022
Net NPA(%)	1.69	1.27	0.94	1.86	1.53

As you can see the current NPA of IDFC first bank is 1.53% which is considered good for a new bank. And maintaining an NPA of less than 2% shows that IDFC first bank is anchoring itself strongly in the Indian banking sector, which is good for long-term sustainable growth.

Got it, now let’s analyze The asset quality of IDFC first bank for our investment purposes

IDFC First Bank Stock Fundamental Analysis 2023: Capital Adequacy Ratio

 Capital Adequacy Ratio (CAR) is a measure that helps banks ensure they have enough money to cover their risks.

When you deposit money into a bank the bank uses that money to lend to others or invest in various projects.

 However, there is always a risk that the people who borrowed the money may not be able to pay it back or the investments may fail, resulting in a loss for the bank.

So there are risks.

To cover these risks, banks keep a certain amount of money aside as a buffer or safety net. This money is known as ‘capital’.

The Capital Adequacy Ratio is a measure of how much capital a bank has in relation to the risks it is taking.

The higher the Capital Adequacy Ratio, the better it is for the bank as it means that they have enough money to cover any potential losses. This is important because if a bank doesn’t have enough capital and they face losses, it may be unable to pay back its depositors, leading to a bank failure.

Now, let’s talk about the CAR of IDFC first bank.

Below is the CAR of the latest two-quarters of  IDFC first bank 

 Q3 – FY22 – 15.38%

Q4 – FY23 – 16.06%

As you can see the capital adequacy ratio (CAR) of the Bank is good enough to cover risks. 

To compare, the CAR of HDFC Bank as of Dec. 2022 is 19.4%.

Therefore we can say that

IDFC first bank is well-capitalized with a capital adequacy of 16.1%. This means that the bank is well-capitalized for growth in the future.

IDFC First Bank Stock Fundamental Analysis 2023: Return On Equity 

Return on Equity (ROE) is a financial metric that shows how much profit a company has made in relation to the amount of money that investors have put into the company. In simpler terms, it is a measure of how much money a company is making for its shareholders.

ROE is calculated by dividing a company’s net income (profit) by its total shareholder equity (the amount of money shareholders have invested in the company). The result is usually expressed as a percentage.

As an investor, you must analyze the ROE to ensure that the company is performing well and will grow your investments.

A higher return on equity means the company is making more profit for its shareholders.

However, you must also analyze other factors vis-a-vis ROE to make better investing decisions.

The ROE of IDFC first bank stood at 10.72% as of quarter 3 of FY23, which is not good enough. An ROE of 15 -20% is considered good.

But as this is a new and growing bank the ROE may become better with growing profits.

IDFC First Bank Stock Fundamental Analysis 2023: Dividend yield

 The IDFC first bank has not paid any dividends since its formation to its retail holders. This is mainly because the bank focuses more on the growth and expansion of its services and products. And for this, it must plow back its profits to increase its capital.

IDFC First Bank Stock Fundamental Analysis 2023: Efficiency Ratio

The efficiency ratio is a measure that banks use to assess how well they are managing their expenses relative to their revenues. It’s a ratio of the bank’s operating expenses to its net revenue.

The efficiency ratio of IDFC first bank as per the March 2022 profit and loss account is 47.28%. This means that the bank is spending around 47 paise to earn Re 1.

IDFC First Bank Stock Fundamental Analysis 2023: Valuation

Now let’s do a valuation study on IDFC first bank.

The valuation of any stock is usually done by using two ratios:

• P/E ratio
• P/B ratio

IDFC First Bank Stock Fundamental Analysis 2023: P/E Ratio

The P/E ratio, also known as the price-to-earnings ratio, is a financial metric used to evaluate a company’s current stock price relative to its earnings per share (EPS). The ratio is calculated by dividing the current market price of a company’s stock by its EPS.

To put simply, the P/E ratio shows how much more or premium you or the market is willing to pay for the stock based on its current or past performance and on the basis of positive or negative future prospects of the stock.

Currently, the P/E ratio of IDFC first bank is around 17.68 which means Investors are willing to pay 17.68 times more for the stock than the stock is earning for them. Such a P/E ratio is attractive for long-term investments.

 Let’s come to our next valuation ratio – the P/B ratio.

 IDFC First Bank Stock Fundamental Analysis 2023: P/B Ratio

The P/B ratio, also known as the price-to-book ratio, is used to evaluate a company’s value relative to its net assets or book value. The ratio is calculated by dividing the current market price of a company’s stock by its book value per share.

The P/B ratio indicates the current price that an investor is willing to pay for a stock. A low P/B ratio indicates that the stock is undervalued relative to its assets, while a high P/B ratio indicates that the stock is overvalued. A stock could be overvalued if the P/B ratio is higher than 1.

The P/B ratio of IDFC first bank is currently 1.17, hence it is slightly overvalued.

You can see that the stock of IDFC first bank is overvalued but if you are considering investing in this stock for the long term then you may not put much weight on the above valuation ratios.

Sources of research

• IDFC first bank investors presentation
• Moneycontrol.com
• NSE – National Stock Exchange of India Ltd

Updates As On 28/10/2023

Profitability

• Net Profit for Q2-FY24 grew 35% YOY from Rs. 556 crore in Q2-FY23 to Rs. 751 crore in Q2-FY24
• driven by strong growth in core operating income.
• Core Operating Profit (pre-provision operating profit excluding trading gains) grew strongly by 38%
  YOY from Rs. 1,052 crore in Q2-FY23 to Rs. 1,456 crore for Q2-FY24.
• Net Interest Income (NII) grew 32% YOY from Rs. 3,002 crore in Q2-FY23 to Rs. 3,950 crore in Q2-
  FY24.
• Net interest Margin (gross of IBPC and sell-down) was 6.32% in Q2-FY24 as compared to 5.83% in
  Q2-FY23 and 6.33% in Q1-FY24.
• Fee and Other Income grew 46% YoY from Rs. 945 crore in Q2-FY23 to Rs. 1,376 crore in Q2-FY24.
  Retail fees constitute 93% of the overall fees for the quarter Q2-FY24.
• Core Operating income (NII plus Fees, excluding trading gains) grew 35% from Rs. 3,947 crore in Q2-
  FY23 to Rs. 5,326 crore in Q2-FY24.
• Operating Expenses grew 34% YoY from Rs. 2,895 crore in Q2-FY23 to Rs. 3,870 crore in Q2-FY24.
• Provisions increased 25% YOY from Rs. 424 crore in Q2-FY23 to Rs. 528 crore in Q2-FY24. The credit
  cost (quarterly annualized) as % of average funded assets for Q2-FY24 was 1.19%.
• RoA (annualized) improved from 1.07% in Q2-FY23 to 1.16% in Q2-FY24.
• RoE (annualized) improved from 10.13% in Q2-FY23 to 11.03% in Q2-FY24.

Deposits & Borrowings

• Customer Deposits increased by 44% YoY from Rs. 1,14,004 crore as of September 30, 2022, to Rs.
• 1,64,726 crore as of September 30, 2023.
• CASA Deposits grew by 26% YoY from Rs. 63,305 crore as of September 30, 2022, to Rs. 79,468 crore
  as of September 30, 2023. CASA Ratio stood at 46.4% as of September 30, 2023.
• Retail deposits grew by 50% YoY from Rs. 84,859 crore as of September 30, 2022 to Rs. 1,27,595
  crore as of September 30, 2023.
• Retail deposits constitute 77% of total customer deposits as of September 30, 2023.
• Legacy High-Cost Borrowings reduced from Rs. 20,449 crores as of September 30, 2022, to Rs. 15,002
  crore as of September 30, 2023.

Assets Quality

• The Gross NPA (GNPA) of the bank has improved to 2.11% as of 30 September 2023 from 3.18% of 30
• September 2022.
• The net NPA (NNPA) of the bank has improved to 0.68% as of 30 September 2023 from 1.09% of 30
  September 2022.
• GNPA of the Retail, Rural, and SME Finance has improved to 1.53% as of 30 September 2023 from
  2.03% of 30 September 2022.
• NNPA of the Retail, Rural, and SME Finance has improved to 0.52% as of 30 September 2023 from
  0.73% of 30 September 2022.
• Excluding the infrastructure financing book which the Bank is running down, the GNPA and NNPA
  of the Bank would have been 1.69% and 0.46% respectively as of September 30, 2023.
• SMA-1 and SMA-2 (31-90 DPD which is the pre-NPA stage) in Retail, Rural, and SME Finance portfolio
  has reduced from 0.89% as of September 30, 2022, to 0.77% as of September 30, 2023.
• Collection efficiency for urban retail business (excluding prepayments and EMI arrears) in current
  bucket continues to remain high at 99.5%.
• Provision coverage ratio (including technical write-off) of the bank has increased to 84.09% as of
  September 30, 2023, from 76.49% as of September 30, 2022.
• Standard restructured book as % of total funded assets improved to 0.38% from 1.03% in September
  30, 2022

Capital Position & Liquidity

• The capital Adequacy of the Bank was strong at 16.54% with a CET-1 Ratio of 13.49% as of September 30,
• 2023.
• During the first week of October 2023, the Bank successfully raised Rs. 3,000 crore from a set of
  Marquee investors via qualified institutional placement (QIP) at an issue price of Rs. 90.25 per share.
• Factoring in the above capital raise, the total CRAR as of September 30, 2023, would be 18.06% with
  CET-1 at 15.01%.
• Average LCR was strong at 122% for the quarter ending on September 30, 2023

Mr. V Vaidyanathan, Managing Director and CEO, of IDFC FIRST Bank, said, “As mentioned before, we are
firmly fixated on building our Bank for the “long run” and are building our fundamentals, our culture, and our
products keeping long-run thinking in mind.”

Source of the above updates of IDFC First Bank Stock Fundamental Analysis: IDFC First Bank press release

Final words: IDFC First Bank Stock Fundamental Analysis 2023: Should You Invest?

In conclusion, after conducting a fundamental analysis of IDFC First Bank, it is evident that the bank has a good financial position, with a healthy balance sheet and a consistent track record of growth in its revenue, though it has not had a steady growth in profits. Also, the bank has taken significant steps to diversify its portfolio and expand its customer base, which bodes well for its future prospects.

For beginner investors, like you, looking to invest in the banking sector, IDFC First Bank presents a compelling opportunity, given its robust fundamentals and promising growth trajectory. However, investors should also keep in mind the risks associated with investing in the banking sector, such as regulatory changes and economic downturns, and make informed decisions accordingly.

Overall, IDFC First Bank is a promising player in the Indian banking sector, with a solid foundation and a clear roadmap for growth. With the right approach and a long-term investment horizon, investors could potentially benefit from the bank’s success in the years to come.

Frequently Asked Questions