Anil Singhvi sees big opportunity in Bandhan Bank, IDFC First Bank; this is the reason

The Reserve Bank of India (RBI) has reduced the risk weightage on loans given by banks to NBFCs, a move that is expected to benefit both sectors. Market expert Anil Singhvi believes this policy shift will provide a significant boost to banks, especially Bandhan Bank and IDFC First Bank.

The Indian stock market, which has been under pressure for the last 15 sessions, saw some relief as DIIs continued to support equities. The oversold conditions have increased the chances of short covering, particularly around the monthly expiry. Additionally, crude oil prices remain soft, which is positive for the overall economy.

Bandhan Bank and IDFC First Bank emerge as strong picks

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Anil Singhvi has recommended buying Bandhan Bank futures with a stop loss (SL) at Rs 133 and targets at Rs 138, Rs 140, and Rs 144. Similarly, for IDFC First Bank futures, he suggests a buy call with SL at Rs 58.50 and targets at Rs 59.50, Rs 60.50, and Rs 62.

Both these banks stand to gain from RBI’s decision, as they have strong lending ties with NBFCs. Bandhan Bank, which has a robust presence in the microfinance segment, will benefit from lower risk weightage, allowing it to lend more aggressively. Meanwhile, IDFC First Bank, known for its retail lending and digital banking initiatives, is also expected to gain from better liquidity and reduced borrowing costs.

Banking sector strongest bet for investors

Singhvi highlighted that Bank Nifty is currently in a stronger position than Nifty, with better growth prospects. With the RBI’s continued support and strong fundamentals, banking stocks are expected to lead the next rally.

He also noted that apart from Bandhan Bank and IDFC First Bank, RBL Bank and IndusInd Bank are also likely to benefit. In the NBFC space, IIFL Finance, Manappuram Finance, PEL, and SBI Cards are well-positioned for gains.

Key takeaway for investors

With banking stocks set for an uptrend, Bandhan Bank and IDFC First Bank present attractive opportunities. The ongoing market correction could be a good entry point for investors looking for long-term value.