Why IDFC First Bank Shares Went up 16% in Three Days

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Why IDFC First Bank Shares Went up 16% in Three Days
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- IDFC (NS: IDFC ) First Bank Ltd (NS: IDFB ) shares bucked the broader downtrend last week in the stock markets as they rose 16% to close at Rs 62.65, its 52-week high. The bank’s board approved a plan to Rs 3,000 crore in one or more tranches.

“The Board at its meeting held on Thursday, February 18, noted the significant opportunities for growth of the Bank based on the strong capabilities the Bank has built and the strong outlook for economic recovery in India, and has approved raising of funds for an amount aggregating up to Rs 3,000 crore, in one or more tranches,” it said in an exchange filing.

The bank had last raised Rs 2,000 crore via institutional placement in June 2020. The stock has risen up almost 70% since December 31.

IDFC First Bank reported a net profit of Rs 130 crore for the third quarter of FY21, ended December 2020 compared to a loss of Rs 1,639 crore in the corresponding quarter last fiscal.

“With this capital raise we will be in a very strong position to take advantage of the economic growth which is coming back roaring,” IDFC First Bank Chief Executive Officer V Vaidyanathan said in an interview. It will also allow the bank to grow its retail lending book by 25% “for many years to come,” he said.

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