IDFC soars 19% as RBI allows company to exit as promoter of IDFC First Bank

Shares of IDFC soared 19 per cent to its 52-week high of Rs 62.60 on the BSE in intra-day trade on Thursday after the company said the Reserve Bank of India (RBI) has allowed it to exit as the promoter of IDFC First Bank as the five-year lock-in period expires. The stock of the non-banking finance company surpassed its previous high of Rs 60.25 touched on May 25, 2021.

IDFC currently owns a 100 per cent stake in IDFC Financial Holding Company, which, in turn, holds 100 per cent in IDFC Asset Management and 36.6 per cent in IDFC First Bank.

In a regulatory filing made to the BSE, IDFC said the RBI on July 20 clarified that "after the expiry of lock-in period of 5 years, IDFC Limited can exit as the promoter of  IDFC First Bank Limited".

Accordingly, the company can now exit as the promoter of IDFC First Bank as the five year lock-in period has ended.

The IDFC Bank was created by the demerger of the infrastructure lending business of IDFC to IDFC Bank in 2015.

IDFC stands to benefit as a reverse merger could help unlock shareholder value, removing the holding company discount, ICICI Securities said in a note.

At 10:16 am, IDFC was trading 14 per cent higher at Rs 60.05 on the BSE, as compared to a 1.1 per cent rise in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled, with a combined 51.8 million shares having changed hands on the NSE and BSE so far. Shares of IDFC First Bank were up 2 per cent at Rs 52.40 at the same time after hitting an intra-day high of Rs 53.25 on the BSE.