IDBI Bank, the divestment-bound public sector financial company, said that India Ratings & Research has upgraded its rating on the bank of multiple triggers including improved profitability and enhanced level capital, according to the regulatory filing of the bank.

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“India Ratings and Research (Ind-Ra) has upgraded IDBI Bank Limited’s (IDBI) Long-Term Issuer Rating to ‘IND A+’ from ‘IND A’ and its Short-Term Issuer Rating to ‘IND A1+’ from ‘IND A1’,” IDBI Bank said in an exchange filing on Tuesday.

The upgrade reflects the bank’s enhanced capital levels, negligible need to provide for legacy gross non-performing advances (NPAs), the manageable impact of COVID-19, improved deposit profile, and Ind-Ra’s continued expectations of the bank maintaining enhanced operating buffers and profitability, IDBI Bank stated.

The rating agency expects synergy building with LIC (Life Insurance Corporation of India) to be put on the backburner, given the impending strategic divestment plans, the bank said.

Factors such as improved profitability prospects; enhanced capital levels; expected growth to normalise the improvement in deposit profile; adequate liquidity; limited support from majority shareholders among others are key triggers for the rating agency to upgrade IDBI Bank’s rating.

IDBI Bank shares trading flat with a positive bias up 0.7 per cent to Rs 35.35 apiece on the BSE intraday as against a 0.43 per cent rise in the Sensex at around 10:50 AM. The scrip has touched Rs 65.25 apiece as a 52-week high on October 18, 2021, and Rs 30.5 apiece as a 52-week low on June 30, 2022.

The stock in the last one month has gained over 11 per cent, while it slipped nearly 8 per cent in the last year as against the BSE Sensex has surged over 4 per cent and 5.5 per cent in one last month and year, respectively.

Finance Minister Nirmala Sitharaman in her Budget speech last year had announced divestment of IDBI Bank, wherein LIC and government are majority stakeholders.