IDBI Bank reported a steady March quarter business update, with overall growth supported by strong traction in advances, even as deposit growth remained relatively moderate. Total business stood at around Rs 6 lakh crore as of March 31, marking a 14% year-on-year increase. The growth reflects balanced expansion across both deposits and loan books, albeit with advances outpacing liabilities.
Net advances rose to Rs 2.53 lakh crore, up 16% YoY, indicating healthy credit demand and improved loan book expansion. The steady uptick suggests continued traction across segments, with the bank maintaining growth momentum in a competitive lending environment.
Total deposits came in at Rs 3.5 lakh crore, up 12% YoY. However, CASA deposits grew at a slower pace of 7% YoY to Rs 1.54 lakh crore, pointing to relatively softer growth in low-cost deposits. The moderation in CASA could keep funding costs under watch, even as term deposits continue to support overall deposit growth. Going ahead, investors will track CASA traction, margin stability, and the sustainability of loan growth.
ALSO READ: IDBI Bank Divestment: Govt May Trim Holding Via OFS Amid Clouds Over Stake Sale Plans
Two weeks ago, the government may consider selling a stake in IDBI Bank through the Offer-for-Sale (OFS) route to increase public shareholding, after the unsuccessful attempt to divest stake in the LIC-controlled lender, sources said. Currently, the public float in IDBI Bank is only 5.29%, limiting the scope of fair valuation.
The remaining shares are with insurance behemoth Life Insurance Corporation of India (LIC), with a controlling stake at 49.24%, while the Government of India (GoI) holding stood at 45.48%. Earlier this month, the proposed sale of a 60.72% majority stake, held jointly by the government and the LIC, was scrapped after financial bids from two potential buyers reportedly fell short of the reserve price.
Low free float restricts the scope for fair market valuation, and expanding this by 10% or 15% would make price discovery more reliable, sources said. It can provide a reliable benchmark for valuation and further make the price discovery process transparent, they said, adding, strategic sale can be pursued even after one or two tranches of OFS.
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