Shares of IDFC First Bank rose over 3% in early trade on Monday, following a positive view from brokerage Jefferies, which maintained its ‘Buy’ rating on the stock and assigned a target price of ₹73, indicating further upside from current levels.
At 9:30 AM, the stock was trading at ₹64.96, up ₹1.96 or 3.11%, with a volume of 1.19 crore shares. The stock opened at ₹63.85 and hit an intraday high of ₹65.26, moving firmly within its circuit band of ₹56.70 to ₹69.30. Its 52-week range stands between ₹52.46 and ₹86.10.
The uptick comes after Jefferies highlighted the bank’s plan to raise ₹7,500 crore via Compulsorily Convertible Preference Shares (CCPS) from marquee investors Warburg Pincus and ADIA-PE. The CCPS will convert into equity if the stock sustains above ₹60 for 45 consecutive trading days, with the conversion price fixed at ₹60.
Jefferies noted that the size of this raise is significantly larger than its earlier capital raise estimates of ₹30 billion for FY26 and ₹40 billion for FY27. The infusion is expected to lift the bank’s Tier I Capital Adequacy Ratio to around 14%, giving it ample headroom to sustain its growth trajectory.
While Jefferies flagged that ROE may be impacted in the near term, ranging between 8–10% for FY26–27 due to the equity dilution, it expects the bank to continue growing at around 20%, supported by strong momentum in retail loans and deposits. However, the brokerage also pointed to microfinance (MFI) as a segment under pressure, requiring close monitoring.
With strong investor backing and adequate capital, analysts see IDFC First Bank as well-positioned to capture long-term opportunities in India’s retail lending space.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
