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ICICI Direct: IDFC’s Upside Potential Led By Value Unlocking 

ICICI Direct: IDFC’s Upside Potential Led By Value Unlocking

A bus conductor displays Indian bank rupee notes for a photograph in Coonoor, Tamil Nadu, India. (Photographer Dhiraj Singh/Bloomberg)
A bus conductor displays Indian bank rupee notes for a photograph in Coonoor, Tamil Nadu, India. (Photographer Dhiraj Singh/Bloomberg)

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ICICI Direct Report

In 2014, IDFC Ltd. received a license to set up a universal bank – IDFC Bank. To strengthen retail franchise, IDFC Bank Ltd., Capital First Ltd. engaged in a merger to form IDFC First Bank Ltd. in December 2018.

Currently, IDFC holds 40% stake in IDFC First Bank. Apart from banking, IDFC owns a mutual fund (100% owned). Its asset under management stands at Rs 1,03,893 crore of which equity AUM – Rs 29,609 crore as of March 2020).

IDFC First Bank has been able to continue its restructuring plan increasing the granularity of balance sheet with retail now forming approximately 55% of advances.

Continued focused build-up of current account and savings account has increased its proportion to upwards of 30%. Prudent provisioning and recent capital raising of Rs 2000 crore provides cushion from any hiccups in asset quality.

Healthy growth in the asset management company business with strong inflow in debt schemes aided by consistent performance bodes well for the future earnings.

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ICICI Direct Instinct IDFCLtd.pdf

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