IDBI Bank hits 52-week low as ICRA, CRISIL downgrade bond rating

The stock hit a 52-week low of Rs 61.75, down 5.5% on BSE in intra-day trade

IDBI Bank hit its 52-week low of Rs 61.75, down 5.5% on BSE in intra-day trade, after domestic rating agencies ICRA and CRISIL downgraded various debt instruments of the state-run bank.

“ICRA has advised that the rating downgrade takes into account the bank’s substantially weak operating and financial performance during fourth quarter of financial year 2017 (Q4FY17) and in the financial year 2017 overall, which has resulted in a significant erosion of its capital (CET-I)," IDBI Bank said in a regulatory filing.

Given the bank’s immediate and large quantum of capital requirement, ICRA has placed its ratings on watch with negative implications, it added.

CRISIL has advised that the downgrade of the Bank’s ratings follows the significant and more-than-expected deterioration in the bank’s assets quality and earnings.

The ratings have been placed on ‘Rating Watch with Negative Implications’ pending clarity on the implications of the bank’s reported capital adequacy ratios as on March 31, 2017. CRISIL is in discussion with the management of IDBI Bank as well as other stakeholders on the implications of this development, the bank said.

In the year ended March 31, 2017, IDBI Bank posted a standalone net loss of Rs 5,158 crore as against a net loss Rs 3,665 crore in financial year 2016.

The bank's gross NPAs almost doubled to 21.25% of the gross advances in Q4FY17 compared to 10.98% in Q4FY16. The net NPAs were 13.21% against 6.78%.

At 1:07 pm; the stock was down 5% at Rs 61.95 on BSE. A combined 8.04 million shares changed hands on the counter on BSE and NSE so far.