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IDBI Bank gains 8% in weak market

The stock surged 8% to Rs 80.75 with combined 63.61 million equity shares changed hands on the BSE and NSE.

SI Reporter  |  Mumbai 

IDBI
IDBI Bank

has surged 8% to Rs 80.75 on the BSE in an otherwise subdued market on back of heavy volumes. The public sector lender, a sole gainer from the index, trading close to its 52-week high of Rs 83.70 touched on February 26, 2018.

At 03:07 pm; 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 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.


First Published: Thu, March 01 2018. 15:10 IST
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