CRISIL has assigned 'CRISIL AA / Stable' Rating in respect of IDFC First Bank Ltd's 'Basel III -Tier 2 Bonds' of Rs. 2000 Crore (Size of Issue) and have re-affirmed existing ratings (CRISIL Al+) in respect of Bank's Certificate of Deposits Programme (CD Programme).
IDFC FIRST came into being on December 18, 2018, following the merger of IDFC Bank Ltd (IDFC Bank) and Capital First Ltd (CFL). At the time of the merger, IDFC Bank had assets under management (AUM) of Rs 75,337 crore (as on September 30, 2018) largely concentrated towards infrastructure and wholesale lending. On the other hand, CFL's AUM (Rs 32,622 crore as on same date) was primarily retail, focused towards small entrepreneurs and the consumer segment. The merged entity had an AUM of Rs 1,04,660 crore as on December 31, 2018.
In the initial few quarters post the merger, IDFC FIRST pro-actively recognised and provided for stressed assets as well as invested in expanding its reach for building a strong retail franchise. Its branches increased to 424 as on December 31, 2019, from 206 as on December 31, 2018.
The rating reflects the bank's healthy capitalisation, increased focus on retailisation of the loan book, and expectation of improvement in earnings profile going forward. These strengths are partially offset by the relatively low, albeit increasing, proportion of current account and savings account (CASA) deposits in borrowings. The ability of IDFC FIRST to maintain good asset quality in the growing retail portfolio over a longer period and on a larger scale will be a key monitorable.
For arriving at its ratings, CRISIL has combined the business and financial risk profiles of IDFC FIRST and its subsidiaries. This is because of majority shareholding, business and financial linkages, and shared brand.
Shares of IDFC First Bank Ltd was last trading in BSE at Rs.38.45 as compared to the previous close of Rs. 38.85. The total number of shares traded during the day was 1002349 in over 1943 trades.
The stock hit an intraday high of Rs. 38.8 and intraday low of 37.8. The net turnover during the day was Rs. 38240676.