At 03:07 pm; IDBI Bank was trading 7.5% higher at Rs 80.15, as compared to 0.33% decline in the Nifty 50 and 1.9% fall in the Nifty PSU Bank index. The counter has seen huge trading volumes with a combined 63.61 million shares changed hands on the BSE and NSE so far.
Moody's Investors Service, ("Moody's") on Tuesday, February 27, 2018, has affirmed the long-term local and foreign currency bank deposit rating of the bank at B1, and changed the outlook to positive from stable.
The positive outlook reflects the upward pressure that could develop on the bank's long-term rating, if its credit fundamentals -- namely the capital position -- continue to improve over the next 12-18 months due to capital infusions from the Indian government, Moody’s said in a press release.
Based on the announced allocations of this capital to individual banks, IDBI will receive Rs 78.81 billion in new capital by March 2018.
Moody's continues to assume a very high probability of government support for IDBI, resulting in three-notch uplift to the deposit rating from the baseline credit assessment (BCA).
Given the positive outlook, IDBI's ratings could be upgraded in the next 12-18 months, if the capital infusion helps strengthen the bank's capital to a level above minimum regulatory requirements (including the capital conservation buffer) under Basel III standards, and/or the bank returns to profitability on a sustainable basis, it added.